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Airlines currently excluded from cover:
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Cover excludes any airline where there is a threat of, or has filed or applied for any form of insolvency or insolvency protection at the time of effecting cover or issuance of the air ticket.
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We no longer list Airlines currently excluded from cover here on this website.
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News Reports and notices.
21 February 2024
American Queen \Voyages suspends operations and ceases trading
News reports state that The line, which operated a fleet of traditional US paddlewheel steamboats, paid tribute to its team, crew and partners in a statement.
It comes after the line, which specialised in cruises on the Mississippi and Tennessee rivers, cancelled a number of sailings scheduled for the remainder of the month.
Staff were informed via an internal memo on Tuesday (20 February) according to reports in the US cruise trade media.
"American Queen Voyages has made the difficult decision to shut down," read the line’s statement.
21 September 2023
iAero Ailrines files for bankruptcy Protection
News reports state that IAero Group, formerly Swift Air, has voluntarily filed for Chapter 11 bankruptcy protection in Florida.
The company, based in Greensboro, North Carolina and Miami, said on 19 September that it made the move “in order to implement a restructuring transaction and assure long-term viability”.
11 July 2023
Jet Airways to liquidate
News reports state that The committee of creditors (CoC) of Jet Airways on Monday told the Supreme Court that the Jalan-Kalrock resolution plan approved by the National Company Law Tribunal (NCLT) is not working and called for the liquidation of the grounded airline.
Liquidation means shutting down the business and selling off assets to repay lenders. Appearing for the creditors, Additional Solicitor General N Venkataraman said that the successful bidder, Jalan-Karlock consortium, has not infused a rupee so far while the CoC has spent over Rs 400 crore. He argued that if the CoC were to recover any of its dues, Jet Airways needs to be liquidated.
Venkataraman said the consortium keeps filing extension pleas to infuse funds but has not deposited any money yet. Moreover, the Directorate General of Civil Aviation is not inclined to renew the airline’s air operations certificate, which expired in May.
The Supreme Court has scheduled the next hearing in two weeks and has called for a response from the consortium. Jet was grounded in April 2019 and the insolvency process started in June 2019. The NCLT approved a resolution plan submitted by JKC in June 2021 wherein it was agreed that the consortium would infuse funds into the airline.
On May 26, the NCLAT granted the JKC a 97 days extension to pay a guarantee of `150 core to the State Bank of India (SBI). The appellate tribunal extended the timeline for payment obligation as it excluded the time period between November 16, 2022 and March 3, 2023, the duration when it was hearing the petition filed by lenders. Meanwhile, the Resolution Professional (RP) of Go First on Monday invited expressions of interest (EoI) for the grounded airline. The deadline to submit the EoIs is August 9, 2023.
10 May 2023
GO Airlines goes into Bankruptcy Protection
News reports state that Go Airlines (India) Ltd was granted bankruptcy protection on Wednesday, bolstering the country's fourth-largest carrier chances of getting back on its feet, but lessors are expected to mount legal challenges to repossess planes.
16 February 2023
Aeromar closes due to financial problems
News reports state that The Mexican airline Aeromar has folded due to financial problems. All scheduled flights are suspended as of Wednesday.
The airline, which commenced operations in 1987, announced the “definitive suspension” of its operations in a statement posted to its website on Wednesday.
“This decision responds to a series of financial problems the airline was experiencing as well as the difficulty of concluding agreements with viable conditions that [would have] guaranteed the long term operations of Aeromar,” the statement said.
“The company’s team made profound financial adjustments to improve the situation, but in an adverse environment, worsened during the COVID-19 pandemic, the measures taken were not sufficient to stabilize the company’s situation.”
31 January 2023
Norwegian Flyr files for bankruptcy
News reports state that OSLO, Jan 31 (Reuters) - Loss-making Norwegian airline Flyr (FLYR.OL) said on Tuesday it would file for bankruptcy after failing to raise the cash it needed for its operations.
"There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation," the company said in a statement, adding the board's decision was unanimous.
"All departures and ticket sales have as a consequence been cancelled."
31 January 2023
Norwegian Flyr files for bankruptcy
News reports state that OSLO, Jan 31 (Reuters) - Loss-making Norwegian airline Flyr (FLYR.OL) said on Tuesday it would file for bankruptcy after failing to raise the cash it needed for its operations.
"There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation," the company said in a statement, adding the board's decision was unanimous.
"All departures and ticket sales have as a consequence been cancelled."
30 January 2023
Norwegian Flyr fails to raise cash with shares dropping 78%
News reports state that OSLO, Jan 30 (Reuters) - Loss-making Norwegian airline Flyr (FLYR.OL) said on Monday it had failed to raise the cash it needs from shareholders and other potential investors, leaving it in a "critical short-term liquidity situation".
Flyr's share price, already weakened by the budget carrier's financial woes, fell 78% in early trade to an all-time low of 0.0015 Norwegian crowns.
While the board continues to explore "feasible alternatives" to secure its continued operation, the potential solutions could wipe out the remaining value of its existing shareholders, the carrier said in a statement.
28 January 2023
Flybe goes into Administration
News reports state that Airline Flybe has cancelled all flights to and from the UK after going into administration.
A statement on the airline's website said it had "ceased trading" and told any passengers expecting to travel with it not to go to the airport.
It added that it would not be able to help passengers arrange alternative flights.
The UK Civil Aviation Authority (CAA) said it would provide advice and information to those affected.
Administrators have taken over the company, which only relaunched in April last year.
6 September 2022
Blue Air grounded by government
News reports state that Romanian low-cost carrier Blue Air has been forced to suspend all flights from Romania after the government froze its bank accounts.
Blue Air said in a statement that services to Romania should operate today “according to the published schedule”, but aircraft would then be grounded until at least Monday September 12.
The carrier hit out at the government saying the “impetuous decision” to freeze its accounts had left it unable to pay its daily operating costs.
The suspension was ordered by the Romanian environment ministry after the head of the national consumer protection authority, the ANPC, issued a statement telling consumers to “stop buying Blue Air tickets”.
Blue Air described the Romanian government action as “irresponsible”.
The carrier – which operates from Luton, Birmingham, Liverpool and Glasgow airports – said it was in talks with “two large investment firms” in London on taking a shareholding in the carrier and “supporting the company in recovering the losses suffered” during the Covid pandemic when it was grounded.
It gave no reason for the government’s decision but blamed it “for significant destruction of passengers’ trust in Blue Air, generating losses of over €5 million euros”.
However, the airline acknowledged it had been under increasing pressure from suppliers to pay for services in advance.
Ryanair has launched rescue fares to accommodate customers affected by the suspension.
18 August 2022
Blue Air to stay in a pre-insolvency state
News reports state that Romanian low-cost airline Blue Air will remain for another year, until June 2023, under the preventive composition procedure - a pre-insolvency state agreed with the creditors two years ago that allows parties to implement a restructuring plan.
The air operator says that, at the end of June, the Bucharest Tribunal approved the 12-month extension of the preventive composition procedure opened by the company in Romania in June 2020.
Separately, Cristian Rada, the main shareholder of Blue Air, took over the CEO mandate of the company.
5 July 2022
SAS files for Chapter 11 in the US
News reports state that SCANDINAVIAN airline SAS has filed for bankruptcy a day after a major strike by pilots grounded almost all its flights.
The Stockholm-based airline said it had filed for Chapter 11 protection in the US, allowing it to reorganise its finances without the threat of civil litigation.
SAS said its operations and flight schedule would not be affected by the announcement. However, flights are already facing disruption after 1,000 pilots in Denmark, Sweden and Norway went on strike. The carrier was forced to cancel 200 flights yesterday.
The walkouts come amid a row over pay and working conditions, as well as anger at the company's decision to hire new pilots rather than rehire those who were laid off during the pandemic.
Anko van der Werff, chief executive of SAS, said the industrial action had put the airline's future at risk.
The pilots union, accused the company of "stretching" negotiations since November last year "without ever having the intention of entering into an agreement with the SAS pilots".
The bankruptcy decision comes as SAS grapples with crippling debts.
20 May 2022
Germany's Tel Aviv Air enters insolvency, suspends flights
News reports state that Germany's Tel Aviv Air enters insolvency, suspends flights
25 February 2022
The Airlines Still Facing Risk of Bankruptcy as Travel Returns
News reports state that Airlines are still facing risk of bankruptcy as travel returns. Stirrings of a recovery in global travel are bringing airlines back from the brink, but the rebound may come too late for several carriers still facing a heightened risk of bankruptcy, a Bloomberg News analysis shows.
Covid-19 paralyzed international aviation as nations locked their borders and imposed other restrictions that are only now being dismantled in some parts of the world. Asia is lagging, with China and Hong Kong almost completely walled off, and the financial positions of some airlines in the region have deteriorated since Bloomberg did the same analysis in March and November 2020.
And while governments in Europe and the U.S. injected billions of dollars in aid into carriers, state help wasn’t as forthcoming elsewhere, leaving cash-strapped airlines to work out restructures in court or directly with creditors.
“These airlines were already in a bad financial state” before Covid-19, said Mark Martin, founder of Dubai-based Martin Consulting LLC. Most of those still stuck in the quagmire are there because the markets they usually cater to came to a standstill due to the pandemic, and they had no other way of attracting flyers, he said.
12 January 2022
SpiceJet to appeal winding up order upheld by Madras Court
News reports state that Madras HC upholds order on winding-up of SpiceJet over $24 million debt, gives time for appeal Madras HC was hearing an appeal by SpiceJet to set aside a single-judge order to wind up the company and on the appointment of a provisional liquidator.
18 October 2021
Air Madagascar set to enter Bankruptcy Protection
News reports state that Air Madagascar is set to enter Bankruptcy Protection.
8 October 2021
Air Seychelles enters administration
News reports state that Air Seychelles has entered administration, as its debt burden of more than $70 million has become too much for the small airline to manage. Today, the government of Seychelles has appointed two administrators to scrutinize the books of the national carrier and advise on the next course of action.
Air Seychelles has announced it will enter into an administration process under the archipelago’s bankruptcy protection laws. A statement issued on Monday, as reported in ch-aviation, laid the blame for the carrier’s financial situation on debt accrued while it was part of Etihad’s ‘equity alliance.’
Etihad sold back its 40% stake in Air Seychelles to the government earlier this year, reportedly for a nominal fee of just one dollar. However, this left the carrier with debts owing to Etihad itself, as well as loans of almost $72 million that were funded by the capital markets.
EA Partners, the bondholders for the debts, were reportedly turning up the heat on Air Seychelles at the end of August. The bondholders had petitioned the airline to be wound down in order to repay its debts. Now, the Seychellois government has reached breaking point. In a statement, it said,
“Air Seychelles has faced significant challenges over the past 18 months arising from the COVID pandemic and its impact on international travel and tourism. However, Air Seychelles’ financial difficulties arise mainly due to significant debt that was incurred during the stewardship of the airline by Etihad Airways, which was previously a 40% shareholder in the company.”
Air Seychelles has had two administrators appointed by the government – Suketu Patel and Bernard Pool. These individuals are now tasked with finding a route out of the situation.
6 September 2021
Philippine Airlines files for bankruptcy
New reposrts state that Last Friday, Philippine Airlines (PAL) filed for U.S. Chapter 11 bankruptcy according to Bloomberg. While this is an indication of serious financial trouble within a company, it is not (yet) shocking for flyers – the airline is permitted to continue normal operations while trying to restructure debt and other financial means in order to survive.
Tickets will keep their value and the airlines Mabuhay Miles loyalty program will keep operating as usual.
While it may seem counter-intuitive that the Manila-based airline is seeking bankruptcy in the United States, this is often the case with multinational companies due to them having an entity in the U.S. for regulatory reasons. With this bankruptcy case, filed in New York, the airline hopes to be released of some debt and to reduce its fleet by 25%.
Both Boeing and Airbus planes will be returned to their lessors, bringing the fleet down from 92 to 70 aircraft. Also, the airline will ask Airbus to delay the arrival of 13 new narrow-body jets. Like other airlines worldwide, PAL has temporarily grounded some of its fleet while demand for air travel remains low.
In many similar cases, we have seen struggling South East Asian airlines transform into a more regional-first airline. For example, Malaysia Airlines, Garuda Indonesia and Thai Airways have all become more focused on their regional operations after restructuring processed triggered by decreased demand due to the pandemic.
Currently, there is no indication if the fleet reduction will impact mainly regional or mainly intercontinental operations. The airline has been aiming for a higher quality of intercontinental service by offering flights on new Airbus A350s to prime destinations like New York (JFK) and London Heathrow (LHR) in recent years.
However, given the strong network in the region and relatively few longer flights, it might make more sense for the airline to put regional flights first.
Times are still tough for the airline industry. The intercontinental airlines, with flag carriers such as British Airways, KLM and Lufthansa, rely on business travel to make money. Although passengers numbers as a whole are on the rise again, the proportion of business versus leisure travelers is way off compared to pre-pandemic numbers. This balance leads to leisure-heavy airlines flourishing, while more traditional airlines are still struggling to stay afloat.
11 June 2021
Stobart Air
News reports state that Boris Johnson has been accused of “strangling” the aviation sector following the abrupt collapse of one of Britain’s biggest regional airlines.
Whitehall officials scrambled contingency plans after Stobart Air, which operates a string of short-haul and services on behalf of Aer Lingus, British Airways and KLM, ceased trading and called in liquidators. Around 480 jobs are thought to be at risk.
The failure had left thousands of passengers at risk of being stranded with a host of scheduled trips at risk of being cancelled.
British Airways and Aer Lingus aircraft said they will operate the services directly instead.
Stobart Air’s collapse follows shock revelations in The Telegraph last weekend that police had been called in to review potential irregularities over a rescue deal.
Ministers have infuriated airlines in recent weeks by backtracking on plans to reopen Britain’s borders. Ministers are now not expecting changes to the Government’s traffic light system until August at the earliest.
The Treasury is understood to have rejected pleas from airline bosses for a sector specific carve-out to extend Rishi Sunak’s job retention scheme until 2022.
Henry Smith, Conservative MP for Crawley and leader of a cross-parliamentary group on the future of aviation, said: “The collapse of Stobart Air must serve as a wake-up call to the Government with our current overly cautious approach to international travel likely to push more and more aviation, travel and tourism businesses to the brink unless a greater degree of flight operations is allowed and soon.”
11 June 2021
Air Antwerp
News reports state that Belgian commuter airline Air Antwerp has confirmed that it is ceasing operations, in a tweet posted on Friday evening. News agency Belga had previously reported that the airline will be dissolved.
Air Antwerp operated a single leased Fokker 50 aircraft on flights between Antwerp and London City Airport, and also offered a small number of codeshare routes with Dutch flag-carrier KLM from Amsterdam to Heathrow, Manchester and Newcastle.
The last flight recorded by the regional airline’s sole aircraft was on 7th May 2021. It is almost certain that the airline is shutting down due to the downturn in passenger traffic as a result of the ongoing Covid-19 pandemic.
5 May 2021
Virgin Australia $3.1 billion loss in 2020
News reports state that Virgin Australia’s $3.1 billion loss in the 2020 financial year provides a “sobering snapshot” of the dire situation for aviation, according to The West Australian’s Aviation Editor Geoffrey Thomas.
The major airline posted the loss in the year ending in June 2020 after flying reduced 4.2 per cent on the previous year’s levels.
Virgin Australia fell into administration before American private equity firm Bain Capital bought the airline for $3.5 billion.
Mr Thomas said the pandemic was a “crippling blow for Virgin” but the loss figures were only a “snapshot of a moment in time”.
11 February 2021
Air Namibia files for voluntary liquidation
News reports state that Debt-laden Air Namibia, which cancelled all flights earlier on Thursday, has been placed into voluntary liquidation, Finance Minister Iipumbu Shiimi said, calling the state-owned airline “unsustainable”.
Government said it had considered all other options, which included potential investment from other airlines and turnaround strategies, before it decided to file for liquidation.
“The country’s economy, can no longer afford to perpetually provide financial support to Air Namibia at the expense of supporting economic growth and critical social services,” Shiimi said during a news conference.
Air Namibia, which employs 644 workers, is buckling under mountains of debt. It has failed to produce financial statements in recent years despite regular state bailouts over the past two decades.
“It is therefore important for the nation to understand that the current debt of Air Namibia is unsustainable and will jeopardise the economic recovery plan,” Shiimi said.
The government estimates it has spent more than 8 billion Namibian dollars ($547.16 million) on Air Namibia, the minister said. The government said it would pay Air Namibia’s employees the value of one year’s salary, over the next 12 months.
In a statement posted on Facebook late on Wednesday, the airline said its was cancelling all flight operations and suspending new bookings from Feb. 11. The airline promised to refund customers.
The move to liquidate Air Namibia comes less than two weeks after the airline signed a 10 million euros ($12 million) settlement agreement with Belgian flyer ChallengeAir.
As part of that agreement, Air Namibia will pay ChallengeAir 9.9 million euros, beginning with a 5 million-euro payment before Feb. 18 and monthly instalments thereafter until January 2022.
Namibia’s Public Enterprises Minister Leon Jooste said the decision to liquidate Air Namibia was not motivated by the problems with ChallengeAir.
28 January 2021
Wizz Air dives into a $116 million loss for third quarter
New reports state that Budget carrier Wizz Air dived to a statutory loss of $116m (£102m) for the third quarter as further restrictions poured yet more pain on the aviation industry.
The Hungarian flier said that revenue plunged 76 per cent in the quarter, falling back to €149.9m.
It carried just 2.3m passengers across the three-month period, almost 80 per cent down on the 10m it carried the prior year.
Wizz Air said that its cash balance stood at €1.2bn. It also recently enhanced liquidity with a €500m bond issue.
Chief executive József Váradi said the carrier was focused on emerging from the crisis as a “structural winner”.
He added: “Our ambition is to fully restart our operations as soon as travel restrictions reduce, at all times protecting the health of customers and employees.”
Over the course of the last year, Wizz Air has opened 14 new bases, as well as a new subsidiary in Abu Dhabi.
The airline is one of very few to have bolstered its fleet during the pandemic, which has seen many carriers offload or retire aircraft.
Jack Winchester, analyst at Third Bridge, said: “The experts we’re speaking to are consistently bullish on Wizz Air’s prospects against its European competitors.
“Wizz Air has a best-in-class cost structure, it has been able to flex capacity effectively, and it has been profitable at lower load factors than many of its peers.
“Wizz Air’s management continues to roll out an aggressive expansion plan. With historical roots in the Eastern European business, Wizz Air has announced a slew of new base openings in 2020 and aims to become the biggest carrier at Gatwick within five years.”
28 January 2021
American Airlines posts historical highest loss for 2020 of $8.9 billion
News reports state that American Airlines reported an $8.9 billion loss for 2020 on Thursday due to the coronavirus, but said it expects a rebound to begin later in 2021.
The big US carrier reported a fourth quarter loss of $2.2 billion, compared with profits of $414 million in the year-ago period following another big drop in travel demand.
American's red-ink report comes on the heels of earlier releases from rivals Delta Airlines and United Airlines that show an industry in turmoil after restrictions to contain Covid-19 were enacted across the globe, shutting down or sharply reducing travel.
"Our fourth-quarter financial results close out the most challenging year in our company’s history," said American Airlines Chief Executive Doug Parker.
"As we look to the year ahead, 2021 will be a year of recovery. While we don't know exactly when passenger demand will return, as vaccine distribution takes hold and travel restrictions are lifted, we will be ready."
American's fourth-quarter revenue fell 64 percent to $4.0 billion following much lower ticket sales. Annual revenues dropped 62 percent to $17.4 billion.
Like other carriers, American has trimmed its capital budget, retired older aircraft, deferred delivery of new planes and reduced headcount through early retirement.
These efforts have reduced daily cash burn to $30 million in the fourth quarter from almost $100 million in April.
American, like its peers, expects a recovery once coronavirus vaccines are widely deployed. But it signaled the first quarter would suffer from the same market conditions as in recent months.
29 December 2020
Montenegro Airlines ceases trading
News reports state that Montenegro Airlines ceased its operations on Saturday after the country's new government refused to continue financing the indebted national carrier.
The airline which was formed 25 years ago has apologised to its passengers for the sudden termination of all flights and thanked them for "the years of trust, travel and friendship."
The company that operated a small fleet of Embraer 195 and Fokker 100s and flew to many European capitals is estimated to have accumulated over 150 million of euros ($A251 million) in debt which grew further with the collapse of the summer tourist season because of the coronavirus pandemic.
Montenegro's new conservative government, which last month took over from a pro-Western leadership, said the company's management suffered from "numerous omissions and shortcomings," adding that monthly salaries to over 350 employees were last paid in September.
The government said it will immediately stop funding the losses, adding that the airline's debt is such that it faced the "possibility of confiscation of aircraft" on foreign airports. But the government added that it plans to form a "completely new" airline in the months to come.
25 November 2020
El All postsloss of $147 million in the third quarter
News reports state that El Al Israel Airlines on Wednesday reported a whopping loss of $147 million following a 94 percent drop in revenues for the third quarter of the year, as a second wave of the coronavirus “dramatically affected” operations of the company, causing it to halt regular passenger and cargo flights.
The third quarter financial statements came with a going concern warning– which expresses doubt regarding the firm’s continued viability — as did its financial statements for the first and second quarter of the year, with revenues plunging and losses ballooning due to the pandemic.
The nation’s flagship airline said the quarterly loss compared to a $27 million profit in the same July-September period a year earlier. Operating revenue for the quarter was $39 million, compared to $647 million in the same period a year earlier.
For the nine months ending September 2020, the company posted a loss of $391 million, compared to a loss of $28 million in the same period a year earlier. Operating revenue for Jan-Sept this year came in at $511 million compared with $1.66 billion in the same period in 2019, down 69%.
The continuation of the pandemic led to the “heavy loss” in the quarter, said El Al CEO Gonen Usishkin in the statement. He said he hoped El Al will soon be able to expand the number of destinations it has recently started flying to. The company was continuing to implement efficiency steps to get the airline back onto the growth path, he said. But without government assistance, the firm will find it hard to meet its obligations and will face “existential risk.”
18 November 2020
Norwegian Air Shuttle files for bankruptcy protection
News reports state that Low-cost carrier Norwegian Air Shuttle said Wednesday it is seeking restructuring and bankruptcy protection in Ireland, where its fleet is held, saying the decision was “in the interest of its stakeholders.”
“Norwegian will continue to operate its route network and both its bonds and shares will trade as normal on the Oslo Stock Exchange,” the carrier said.
Like other airlines, its fleet is now mostly grounded as the pandemic has caused a near-total halt to global travel.
It said that its top priorities remain “safeguarding as many jobs as possible, while rightsizing its asset base.” It did not provide further detail but said the process under Irish law may last for up to five months.
“Norwegian is therefore confident that it too will successfully emerge as a stronger and leaner airline ready to meet renewed airline travel demand in 2021 after the COVID pandemic subsides,” it said.
Earlier this month, the Oslo-based company said it was facing a “very uncertain” future after the Norwegian government turned down its request for additional financial support. The government said that the airline had been struggling financially even before the pandemic and that aid should be targeted first at healthy businesses.
After that, Norwegian announced it had to lay off another 1,600 staff and ground 15 of the 21 planes it had been flying with. The airline called it “a sad day for everyone in Norwegian.”
In May, the carrier got 3 billion kroner ($290 million) in loan guarantees from the government as part of its restructuring plan.
But the second call for aid was turned down on Nov. 9. The airline then said it “leaves Norwegian Air Shuttle ASA in a challenging situation.”
18 November 2020
Air Asia Japan files for bankruptcy
News reports state that AirAsia Japan filed for bankruptcy proceedings in the Tokyo District Court on Tuesday with about 21.7 billion yen ($208 million) in liabilities, becoming the first airline to fail in the country during the COVID-19 era.
The move comes after the budget carrier's Malaysian parent, AirAsia, cut off aid to the Japanese joint venture amid a global downturn in air travel.
More than 23,000 customers have not received refunds for canceled flights, according to Tamotsu Ueno, the lawyer serving as AirAsia Japan's administrator. AirAsia says it will provide credits that can be used for international flights on group airlines.
The company plans to seek aid from shareholders, Ueno told a news conference.
Besides AirAsia, investors include Japanese e-commerce group Rakuten, health and beauty products maker Noevir Holdings, and sporting goods store operator Alpen.
AirAsia Japan is the only airline in the country with its hub at the Nagoya area's Chubu Centrair International Airport. Before halting flights, the airline operated domestic routes to Sapporo, Sendai and Fukuoka as well as an international route to the Taiwanese city of Taipei.
Ueno told reporters at the airport that unpaid customer refunds amount to slightly more than 500 million yen.
AirAsia Japan Chief Operating Officer Jun Aida told Nikkei that the company "will cooperate with necessary procedures."
13 November 2020
Emirates suffers its largest loss $3.4 billion in over 30 years
News reports state that Dubai-based Emirates airline on posted its first loss in more than three decades, saying it had been badly hit by the coronavirus lockdown that brought air transport to “a literal standstill”.
The Middle East’s largest carrier said it suffered a US$3.4 billion loss in the six months to September, prompting its parent group to slash its workforce by a quarter.
“In this unprecedented situation for the aviation and travel industry, the Emirates Group recorded a half-year loss for the first time in over 30 years,” the airline’s chairman and chief executive, Sheikh Ahmed bin Saeed Al Maktoum said in a statement.
“No one can predict the future, but we expect a steep recovery in travel demand once a Covid-19 vaccine is available, and we are readying ourselves to serve that rebound.”
The last time the airline reported a loss was in the 1987-88 financial year, when it was starting up its operations.
The airline, which resumed flights in May after a suspension of almost two months, saw revenue fall 75 per cent to US$3.2 billion. Over the half-year, it carried just 1.5 million passengers, down 95 per cent from the same period last year.
16 September 2020
SpiceJect reports $80 million loss for June quarter
News reports state that Budget carrier SpiceJet on Tuesday reported a net loss of Rs 600.5 crore ($80million) for the first quarter ended June 30, owing to the suspension of flight operations due to the coronavirus-induced lockdown.
It had posted a net profit of Rs 262.8 crore in the corresponding period of the previous financial year.
The airline's operating revenue stood at Rs 521 crore in the first quarter of 2020-21, significantly lower as against Rs 3,002.8 crore a year ago, it said in a statement.
Operating expenses during the June 2020 quarter were Rs 1,311.6 crore, compared to Rs 2,886.7 crore in the year-ago period.
SpiceJet Chairman and Managing Director Ajay Singh said, "Flight operations were suspended for most part of the (first) quarter, and the partial resumption of flights initially and weak demand thereafter were a reminder of the significant problems that this pandemic has resulted in."
In July, the country's largest airline IndiGo declared a net loss of Rs 2,884.3 crore for the first quarter of 2020-21.
Scheduled domestic flight services were suspended in India from March 25 to May 24 due to the lockdown. The domestic flights resumed from May 25 but in a curtailed manner.
Scheduled international flights have been suspended in India since March 23 due to the coronavirus-triggered lockdown. However, special international passenger flights have been operating in India under the Vande Bharat Mission since May and under bilateral air bubble arrangements formed between India and other countries since July.
20 August 2020
Sky2Go Airlines ceases operations
News reports state that Go2Sky is ending operations in September 2020 after succumbing to the impact on the market due to the pandemic, says the head of the airline, Daniel Ferjanček.
20 August 2020
Qantas $1.4 billion loss
News reports state that Australia’s Qantas Airways Ltd (QAN.AX) said state border closures were severely hampering a recovery in the domestic aviation market, which, alongside its lack of international flying, would lead to a significant loss this financial year.
The airline on Thursday posted a full-year net loss of A$1.964 billion ($1.41 billion) for the 12 months that ended June 30, one of its largest ever, driven by impairment charges and restructuring costs meant to help it weather the coronavirus pandemic.
Chief executive Alan Joyce said that trading conditions were the worst in the airline’s 100-year history and that a national framework on when states could open borders was needed to boost domestic flying.
He said it made sense to lock down in Victoria, which has the nation’s highest case count, but not to ban travel between places like Western Australia and South Australia, which are reporting no community tranmission of COVID-19.
“We’re not saying, ‘open the borders’ blankly,” Joyce said. “We’re saying, ‘Let’s have the rules to say what would you have to see in order for those borders to be open.’”
The airline is running only 20% of its usual domestic schedule in August, but he said that could increase to more than 75% if all state borders reopened before international ones.
Most international flying is unlikely to resume until a vaccine is widely distributed, which might occur in mid- to late 2021, Joyce said.
Qantas took about A$2.8 billion worth of one-off charges alongside its results, which included a writedown of A$1.4 billion on its Airbus SE (AIR.PA) A380 fleet, which is parked in the Mojave desert.
Its biggest-ever net loss was A$2.84 billion in 2014, which prompted major cost cuts and led to strong annual profits of about A$900 million for four years before the pandemic.
19 August 2020
LATAM Airlines $890 million 2nd quarter losss
News reports state that LATAM Airlines, South America's largest carrier, on Tuesday said it had laid off 12,600 employees since March: or almost 30per cent of its pre-coronavirus workforce: due to the pandemic that has upended the global travel industry.
The carrier went from employing almost 43,000 people across Latin America and the United States to 29,957 as of Tuesday, the company said.
LATAM reported a net loss of US$890 million for the second quarter, slammed by the pandemic that drove the company into a Chapter 11 bankruptcy filing in May.
"COVID-19 has had a very significant impact, which is reflected in the company's numbers," LATAM CFO Ramiro Alfonsin told journalists.
While employees already had their salaries cut by half in late March when the pandemic led to widespread travel restrictions in the region, it said its remaining employees are now facing cuts of 20per cent through September.
LATAM and its rivals are struggling to preserve cash while operating just a small fraction of their usual flights. The airline has said it will need to be a smaller carrier for years to come, and it is unclear whether there will be more job cuts in the future. Cutting down its workforce has helped preserve some liquidity.
The carrier posted a 75per cent drop in revenue between April and June due to widespread travel restrictions around Latin America.
12 August 2020
Cathay Pacific $1.3 billion loss for 1st quarter
News reports state that Cathay Pacific has warned that rising geopolitical tensions and a global recession are likely to compound the pressures from coronavirus that drove the Hong Kong airline to a record loss.
The company said on Wednesday that lost HK$9.9bn ($1.3bn) in the first half of the year, confirming figures released in a profit warning last month. That compared to a profit of HK$1.3bn over the same period last year.
Cathay, which unveiled a $5bn government-backed rescue plan in June, added it did not expect a “meaningful recovery” in passenger numbers for some time, citing the impact of global travel restrictions and quarantine measures.
“This is the biggest challenge to the aviation industry that Cathay Pacific has ever witnessed,” Patrick Healy, the carrier’s chairman, said in a statement.
“With a global recession looming, and geopolitical tensions intensifying, trade will probably come under significant pressure, and this is expected to have a negative impact on both air travel and cargo demand,” Mr Healy added.
The health crisis has piled pressure on Hong Kong’s flag carrier, which was already grappling with fallout from the social unrest that swept across the territory in 2019 and a trade war between the US and China. The Trump administration in July stripped Hong Kong of its special trading status after Beijing imposed a controversial security law on the city.
The cargo business has been a rare bright spot for Cathay this year. Revenues from the division increased 8.8 per cent year on year to HK$11.2bn despite a fall in overall tonnes transported, as fewer planes in the air drove up prices.
Andrew Lee, an analyst at Jefferies, said that cargo was “the key positive from the results” given weakness in passenger travel due to Covid-19.
Everything is still operating off the assumption that Cathay is still a global premium passenger business
At the end of April, the company began carrying cargo in the passenger cabins of some of its Boeing aircraft as part of a push to increase capacity.
Passenger numbers fell by more than three quarters from last year, forcing passenger revenue down by more than 70 per cent year on year to HK$10.4bn.
Cathay shares rallied their most in more than a decade ahead of the results on Wednesday, and were up 11.4 per cent following the release.
The gains also came after the Global Times, a Chinese state-backed media outlet, tweeted that Hong Kong’s airport could soon resume transfer flights to mainland China.
But analysts said there was still a lack of clarity over the airline’s future direction and were looking for additional cost-cutting.
Management will by the fourth quarter recommend to the board Cathay’s “optimum size and shape”, the group said.
“It’s not like the company has rounded a corner,” said Luya You, an analyst at Bocom International.
“Everything is still operating off the assumption that Cathay is still a global premium passenger business,” she added. “If this isn’t their strategy any more moving forward, that’s something we really need to know”.
29 July 2020
Singapore Airlines $805 million loss
News reports state that Singapore Airlines Ltd. posted its biggest quarterly loss on record as the coronavirus left it flying less than 1% of its usual number of passengers.
The net loss in the three months to June was S$1.12 billion ($815 million), compared with net income of S$111 million a year earlier, the carrier said in a statement Wednesday. Sales dropped 79% to S$851 million and traffic measured by revenue passenger kilometers sank 99.5%.
Air traffic the world over has plunged because of tight border controls and a reluctance to travel during the pandemic. The International Air Transport Association said Tuesday that the airline industry is unlikely to fully recover before 2024. The situation is particularly dire for the likes of Singapore Airlines as it has no domestic market to fall back on.
Singapore Airlines said its passenger capacity may still be less than half pre-coronavirus levels by the end of its fiscal year next March, and that the recovery in international travel is slower than initially expected.
The carrier’s fuel hedging policy led to a S$535 million loss in the quarter, while there was also a S$127 million hit from the liquidation of NokScoot Airlines Co. Singapore Airlines owned a 49% stake in the low-cost Thai carrier that collapsed in June.
Singapore Airlines scaled back its network to just 14 cities in the quarter, before increasing it to 24 by the end of June. Its SilkAir unit ceased all operations temporarily except for flights to Chongqing, China, and has indefinitely suspended flights to the Thai resort island of Koh Samui. Low-cost unit Scoot operated a minimal network to cities including Hong Kong and Perth.
Passenger capacity at the end of the second quarter is forecast to be about 7% of the level before Covid-19. Out of a fleet of 213 passenger aircraft, only 32 are being deployed for passenger services, the airline said.
Singapore Airlines is reviewing its network and fleet, which is likely to lead to a material impairment of its older aircraft, particularly the Airbus SE A380, accounting for about S$1 billion, the company said. It expects to complete the review by the end of the current quarter.
The airline said it has reached an agreement with Airbus on adjusting aircraft deliveries and payments, though it didn’t provide details. It is still in talks with Boeing Co.
Singapore Airlines’ shares fell 1.1% to close at S$3.53 before the earnings release. They’ve slumped 45% this year, among the worst on a Bloomberg gauge of carriers in the Asia Pacific region.
29 July 2020
Spice Jet $108 million loss
News reports state that Budget carrier SpiceJet on Wednesday reported a net loss of Rs 807.1 crore for the fourth quarter ended March 2020, owing to the coronavirus-induced lockdown that led to travel restrictions. It had posted a net profit of Rs 56.3 crore in the corresponding quarter of the previous financial year, the airline said in a statement. For the full financial year 2019-20, its net loss stood at Rs 934.8 crore as against a net loss of Rs 316.1 crore in 2018-19. The airline in the statement also informed that it's Chief Financial Officer Kiran Koteshwar has resigned and "decided to pursue an exciting opportunity overseas". He will remain with SpiceJet till August 31 and for a transition thereafter, it said. However, its total income in January-March 2020 rose to Rs 3,057.3 crore, compared with Rs 2,571.8 crore in the year-ago period. For the full financial year 2019-20, the airline's total income also jumped to Rs 13,206 crore, against Rs 9,258 crore in 2018-19.
The company's total expenses during the quarter under review also increased to Rs 3,864.4 crore, against Rs 2,515.5 crore a year ago. In complete 2019-20, it stood at Rs 14,141 crore as compared with Rs 9,510 crore in the previous financial year. SpiceJet Chairman and Managing Director Ajay Singh said, "Two key factors that adversely impacted our performance and bottom-line (profit) were: The COVID-19 pandemic, which started affecting demand adversely from mid-February, and grounding of the 737 MAX, which has been out of service for over a year now." He added that despite the year-long grounding of the 737 MAX aircraft, SpiceJet ran a profitable operation till the COVID-19 pandemic hit to demand from mid-February. The aviation industry, both in India and globally, is going through the toughest-ever phase in its history, he said.
In a BSE filing, the airline's independent auditor S R Batliboi and Associates LLP said the airline's financial statement indicates that the "(SpiceJet) group has accumulated losses and its net worth has been fully eroded". It also added that the group has incurred a net loss during the current and previous year and, the group's current liabilities exceeded its current assets as at the balance sheet date. "These conditions, along with other matters... indicate the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern," the auditor said.
Scheduled international passenger flights continue to remain suspended in India since March 23. However, India has signed bilateral 'air bubble' agreements with countries like the US, Germany and France that allow airlines of both the countries to operate special international charter flights. The aviation industry has been significantly impacted due to the travel restrictions imposed in India and abroad in view of the coronavirus pandemic. Airlines in India have taken cost-cutting measures such as pay cuts, leave-without-pay and firings of employees. India resumed domestic passenger flights from May 25 after a gap of two months. The airlines have been allowed to operate only a maximum of 45 per cent of their pre-COVID-19 domestic flights.
2 July 2020
El Al suspends all flights
News reports state that El Al suspended all of its flights on July 1 until further notice as CEO Gonen Usishkin ordered all aircraft, including those on cargo operations, to return to Israel, sources at the carrier told the business newspaper Globes.
The decision was made after the company's pilots' union announced late on June 30 that pilots would no longer work for the company. Earlier that day, El Al posted a USD140 million loss for the first quarter, compared to the USD55 million loss it sustained in the first quarter of last year.
Only 110 of the airline's 650 pilots are currently employed, according to Globes. The rest, like 5,800 out of El Al's total workforce of 6,300, are on leave without pay.
"The administration of the company did not even respect agreements that were signed with the union less than a month ago. The union had no choice but to arrive at the conclusion that the owners of the company are unable to save it from its situation," the union announced on Israel's KAN 11 television news on the evening of June 30.
El Al has said that it is in the advanced stages of negotiations on a government aid package but needs the agreement of employee representatives for it to go ahead. It is seeking a USD400 million cash injection, which could either be transferred in its entirety as a state-guaranteed loan or with USD250 million as a loan and USD150 million as a state-backed equity offering.
Last week, El Al said it had reached a deal with its cabin crew union to cut the number of permanent and temporary flight attendants and aviation managers, which would save USD30 million a year.
1 July 2020
LIAT Airlines to be liquidated
News reports state that the Prime Minister of Antigua and Barbuda Gaston Brown has announced plans to liquidate the regional carrier, LIAT.
Browne, who made the announcement on Saturday, said a new entity will be formed and a meeting of all shareholders will be held shortly to discuss the matter.
“COVID would have actually, let's say increased the losses exponentially, so whereas in all of 2019 LIAT made a loss of about EC$12 million, that was within the means of the shareholder governments to subsidise,” said the prime minister who was speaking on local radio .
“You would have found that since COVID, the planes have been grounded, they have to pay the lease payments and they are not getting any revenue. A decision will have to be made to collapse it and then maybe the countries within the region will have to come together to form a new entity.”
18 June 2020
Level Europe Airlines files for insolvency
News reports state that Austrian short-haul budget carrier Level Europe plans to file for insolvency, it said on Thursday, becoming the latest airline casualty of the coronavirus crisis despite the financial might of parent IAG (ICAG.L).
The small airline, previously known as ANISEC, began operating in 2018. It has six Airbus short-haul jets and is part of IAG-owned Vueling Group.
British Airways owner IAG also operates a long-haul airline called Level, which is separate from Level Europe, an IAG spokeswoman said.
Level Europe blamed the COVID-19 pandemic for its move to cease trading, joining a growing list of airline failures after planes across the world were grounded for months during coronavirus lockdowns.
Anglo-Spanish group IAG, which also owns Iberia and Aer Lingus, said in April that it had 10 billion euros (£9 billion) of liquidity, but Chief Executive Willie Walsh has said it is burning through cash as the crisis continues and has warned that British Airways is “fighting for survival”.
3 June 2020
Lufthansa posts a first quarter net loss of 2.1 billion euros
News reports state that German airline Lufthansa posted a net loss of 2.1 billion euros ($2.35 billion) in the first quarter, writing down the value of assets as the coronavirus pandemic hits the travel sector.
The loss, which compares to a net loss of 342 million euros in the year-earlier period, was driven by write-downs of 266 million euros on its fleet, as well as write-downs on the book value of catering business LSG North America by 100 million and on budget unit Eurowings by 57 million, the carrier said on Wednesday.
Lufthansa, which had grounded almost all its aircraft at the height of the coronavirus pandemic, confirmed a loss before interest and tax of 1.2 billion euros during the first three months of the year, first reported in April.
The airline is bracing for a significant decline in 2020 earnings before interest and tax, adjusted for one-off items, from the 2 billion euros reported last year, saying demand was only gradually recovering and that it was unable to be more specific amid uncertainty over the pandemic.
The group's non-executive board on Monday approved a 9 billion euro ($10 billion) government bailout that will force it to cede some of its prized landing slots to rivals.
Under the plans, the German government will take a 20% stake in the airline, which could rise to 25% plus one share in the event of a takeover attempt, as well as two seats on its supervisory board.
28 May 2020
LATAM files for bankruptcy protection
News reports state that Latin America’s largest carrier Latam Airlines has filed for bankruptcy protection, the second airline in the region to fall victim this month to the coronavirus crisis.
Latam made a Chapter 11 bankruptcy filing late on Monday in a New York court, saying it intended to keep flying passengers and cargo, subject to travel restrictions and demand, while it restructures.
A string of travel industry groups around the world have sought protection from creditors or government bailouts as the Covid-19 crisis wreaks havoc on the sector. Colombia’s Avianca airline filed for bankruptcy protection on May 10, while Lufthansa on Monday agreed a €9bn rescue from the German government.
“Latam entered the Covid-19 pandemic as a healthy and profitable airline group, yet exceptional circumstances have led to a collapse in global demand [that] has not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future,” said Roberto Alvo, the group’s chief executive.
Latam, which was forced to cancel 95 per cent of its flights as the coronavirus pandemic hit Latin America, had only last week announced plans for a gradual recovery of capacity in its 330-strong fleet, targeting growth of 9 per cent in June and 18 per cent in July.
Analysts at JPMorgan estimated in March that Latam had only enough cash for four months if all flights stayed grounded.
Latam, which reported revenues of $10.4bn last year, said it had secured up to $900m in credit from three of its largest equity holders. The debtor-in-possession financing, a form of senior debt available to companies that have filed for bankruptcy, was provided by Qatar Airways, which owns roughly 10 per cent of the group’s equity, Chile’s Cueto family and Brazil’s Amaro family.
The Cueto family was the airline’s largest shareholder at the end of February, holding 21.46 per cent of the equity. Latam is seeking further support from its other owners. Delta Air Lines of the US, which is facing its own severe strains, is Latam’s second biggest-shareholder after buying a 20 per cent stake last year for $1.9bn.
Latam is also talking to the governments of Chile, Colombia and Peru to try to find additional financing and protect jobs. Before the pandemic, the airline was flying to 125 destinations in Latin America and the Caribbean.
25 May 2020
Hertz files for bankruptcy protection
News reports state state that the car rental company Hertz filed for bankruptcy protection on Friday. The heavily indebted 102-year-old business was unable to withstand the coronavirus pandemic, which has crippled global travel and demand for rental vehicles.
The Estero, Florida-based company's lenders were unwilling to grant it another extension on its auto lease debt payments past a Friday deadline, triggering the filing in U.S. Bankruptcy Court in Delaware. Hertz and its subsidiaries will continue to operate, according to a release from the company.
By the end of March, Hertz Global Holdings Inc. had racked up $18.7 billion in debt with only $1 billion of available cash.
Starting in mid-March, the company lost all revenue when travel shut down due to the novel coronavirus, and it started missing payments in April. Hertz has also been plagued by management upheaval, naming its fourth CEO in six years on May 18.
"No business is built for zero revenue," former CEO Kathryn Marinello said on the company's first-quarter earnings conference call May 12. "There's only so long that companies' reserves will carry them."
In late March, Hertz shed 12,000 workers and put another 4,000 on furlough, cut vehicle acquisitions by 90% and stopped all nonessential spending. The company said the moves would save $2.5 billion per year.
But the cuts came too late to save Hertz, the nation's No. 2 auto rental company. In a note to investors in late April, Jefferies analyst Hamzah Mazari predicted that rival Avis would survive the coronavirus crisis but Hertz had only a 50-50 chance "given it was slower to cut costs."
On May 18, Hertz took the unusual step of naming operations chief Paul Stone as CEO and announced that Marinello would step down as CEO and from the company's board. Mazari called the change unusual just days before a potential bankruptcy filing. He also noted that CEO changes have been common at Hertz since financier Carl Icahn entered the company in 2014.
Icahn's holding company is Hertz's largest shareholder, with a 38.9% stake in the company, according to FactSet.
Deutsche Bank analyst Chris Woronka credited Marinello with reigniting Hertz's revenue growth, writing in a note to investors that it rose 16% in 2018 and 2019 combined.
Hertz's bankruptcy protection filing was hardly a surprise. In its first-quarter report filed earlier in May with securities regulators, the company said it may not be able to repay or refinance debt and may not have enough cash to keep operating.
"Management has concluded there is substantial doubt regarding the company's ability to continue as a going concern within one year from the issuance date of this quarterly report," it said.
Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment, but the company is likely to continue operating.
19 May 2020
Thai Airlines files for Bankruptcy protection
News reports state that the Thai Government has confirmed that Thai Airways International, will submit a rehabilitation plan as well as an application for restructuring proceedings to a bankruptcy court.
A senior government spokeswoman confirmed to Reuters that the airline will be filing for the Thai equivalent of the US Chapter 11 bankruptcy rule.
In Thailand, the Chapter 11 option is actually Chapter 3/1 under the Corporate Reorganisation section of the Bankruptcy Act. It was added to the Act following the Asian Financial Crisis in 1998.*
In the US, Chapter 11 offers protection from creditors while a company restructures or possibly sell assets to regain financial momentum. It’s a common practice in the US, where at least 16 well-known airlines including United Airlines have at one time or another sought shelter under Chapter 11 provisions.
The proceedings for business reorganisation governed by Thailand’s Chapter 3/1 of the Act start with the filing of a petition for restructuring by the debtor, the creditors owed more than THB 10 million, or a relevant government agency. When the Court approves the application for restructuring, it gives the debtor protection by declaring an automatic stay which restricts the ability of creditors to take action against the company to recover any sums owed to them.
“The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court… the procedure will be submitted to cabinet tomorrow,” said Narumon Pinyosinwat, Thai Government spokeswoman, according to a Reuters report.
It is understood that the Thai Government will now extend THB58.1 billion (USD$1.4 billion) in lifelines to the struggling airline.
11 May 2020
Avianca Airlines, Latin America's second largest carrier files for bankruptcy
News reports state that Colombia’s Avianca — the second-largest airline in Latin America — filed for Chapter 11 bankruptcy in the US on Sunday, saying coronavirus has presented it with the biggest challenge in its century-long history.
In a filing to a bankruptcy court in New York, it said the measure was needed to ensure Avianca can “emerge as a better, more efficient airline that operates for many more years".
“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the Covid-19 pandemic,” said Anko van der Werff, the chief executive. “Entering into this process is a necessary step to address our financial challenges.”
Avianca is second in size only to Chile’s Latam in Latin America and is the second-oldest airline in the world behind Dutch carrier KLM. It began life in the Colombian city of Barranquilla in 1919, just 16 years after the Wright brothers’ historic first flight.
It carried over 30m passengers last year to 76 destinations in 27 countries in the Americas and Europe. It generated revenue of $4.6bn in 2019 and employed 21,000 people, most of whom have been furloughed due to coronavirus.
Avianca said its consolidated revenue has fallen by over 80 per cent since its flights were grounded in mid-March.
The New York-listed airline has had financial problems for years, and survived bankruptcy proceedings in the early 2000s. Last year, longtime owner and entrepreneur Germán Efromovich was pushed out in a boardroom coup and the company is now in the hands of Kingsland Holdings, in turn controlled by United Airlines.
A new board announced a major reprofiling of the company’s debt and Avianca celebrated its 100th birthday last November saying it was back on track and ready to fly for another century.
Since the pandemic hit, Mr van der Werff has been campaigning for government help, saying the airline needs a state loan — not a full bailout — but that has not been forthcoming. Avianca had faced a $65m debt repayment this weekend.
Colombia, where Avianca has over 50 per cent market share, has imposed strict lockdown measures to combat coronavirus, including a halt to all international and domestic flights until at least the end of this month. Avianca says 88 per cent of the countries in which it operates have imposed either total or partial air transport restrictions.
Airlines around the world have been slammed by coronavirus, which has prompted a 90 per cent fall in global air travel, according to the International Air Transport Association. It says it expects industry revenues worldwide to drop by $314bn this year.
22 April 2020
LGW files for insolvency
News reports state that German regional carrier LGW has filed for insolvency after Lufthansa low-cost subsidiary Eurowings terminated a wet-lease agreement.
LGW’s parent, logistics provider Zeitfracht Group, says Eurowings ended the deal “at short notice in view of current developments”, having parked around 90% of its own fleet.
Dusseldorf-based LGW operated its 15 Bombardier Q400 turboprops exclusively on Eurowings’ behalf.
Zeitfracht says the regional carrier has “currently no lasting positive economic perspective” but is still looking for ways to continue operating.
“We have made intensive efforts to find employment for our LGW aircraft throughout Europe and will continue to do so,” states LGW managing director Dominik Wiehage.
He adds that it is “impossible to estimate – as things stand today – whether we will receive public funds to bridge the period until air traffic resumes”.
However, the group wants to “keep the option open” for LGW staff to be “involved again in a new start in air traffic”.
LGW employs pilots and flight attendants numbering 294 in total, plus a further 60 in administration or maintenance.
The entire fleet is parked in Slovakian capital Bratislava.
In 2019, Zeitfracht disclosed a plan to replace its turboprop fleet with Embraer 190s, with a schedule to complete the transition in 2021.
LGW’s sister carrier, which formerly operated as WDL Aviation, has a fleet of E190s.
Zeitfracht last year combined WDL and LGW under new German Airways branding.
German Airways’ website indicates that it has five E190s available for wet-lease and charter flights.
Previous customers cited on the website include Air France, now-defunct Air Italy, Braathens Regional Airlines, EasyJet, Finnair, Polish flag carrier LOT, Greek regional airline Sky Express, and several German football clubs.
Cirium fleets data shows that German Airways has a BAe 146 in addition to the E190s. The entire fleet is listed as being in storage.
Zeitfracht has not responded to Cirium’s request for comment about German Airways’ operating status and the potential impact of the LGW insolvency.
22 April 2020
Air Mauritius enters Administration
News reports state that Air Mauritius AIRM.MZ has entered voluntary administration after coronavirus-related disruptions made it impossible for the airline to meet its financial obligations for the foreseeable future, its board said on Wednesday.
Airlines around the world have been forced to ground their planes after governments imposed travel restrictions and locked borders to slow the spread of the COVID-19 pandemic.
The 52-year old carrier, which ferries 1.7 million passengers a year to 22 destinations across four continents, said the pandemic had struck just as the company was seeking to change its business model to address existing financial problems.
A. Sattar Hajee Abdoula and Arvindsingh K. Gokhool, have been appointed as administrators, the Air Mauritius board said in a statement.
Other airlines have suffered a similar fate, with Virgin Australia (VAH.AX) and South Africa Airways having called in administrators.
21 April 2020
Virgin Australia goes into Voluntary Administration
News reports state that Virgin Australia has confirmed it has entered voluntary administration - making it Australia's first big corporate casualty of the coronavirus pandemic.
The country's second-largest carrier cut almost all flights last month following wide-spread travel bans.
It was already struggling with a long-term A$5bn (£2.55bn; $3.17bn) debt.
The airline is now seeking new buyers and investors, after failing to get a loan from Australia's government.
Virgin Australia chief executive Paul Scurrah said: "Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the Covid-19 crisis.
"Australia needs a second airline and we are determined to keep flying."
Meanwhile, Sir Richard Branson - whose Virgin group is a part-owner of Virgin Australia - has offered a Caribbean island as collateral to help get a UK government bailout of Virgin Atlantic.
■ Branson offers Caribbean island to secure bailout
Shares had been suspended in the firm for the past fortnight as it struggled to find a survival plan.
Canberra refused a request from the company for a A$1.4bn loan, but in the past month had announced around A$900m in support for all local airlines.
Virgin Australia has turned just two statutory profits in the past decade.
It is part-owned by a number of entities including the UAE government, Singapore Airlines, China's HNA, and Sir Richard Branson's Group.
It employs about 10,000 people directly and another 6,000 through ancillary businesses.
Consulting firm Deloitte announced it had appointed as administrator on Monday. It will try and restructure the firm's debt, pay off creditors and find a buyer - with private equity groups expected to be interested.
Consumer groups and local politicians have voiced concerns that unless the airline is resurrected, national flag carrier Qantas will hold a near-monopoly in Australia.
Air travel is crucial in the vast continent where distances between coastal capital cities make flights the only practical way to travel quickly domestically.
Virgin Australia had previously held around 31% of domestic flights, while Qantas controlled around 58% of the market.
The long-term loss of the airline will also be seen as a major blow to Australia's tourism industry - a big GDP driver.
Before the shutdown, Virgin Australia had flown about 130 aircraft to 41 destinations - mainly domestic routes, but also international services including to New Zealand, Bali, Fiji, Tokyo and Los Angeles.
5 April 2020
Ravn Air files for bankruptcy
News reports state that Ravn Air Group, Alaska's largest rural carrier, is set to stop operations, temporarily lay off all of its remaining staff, and file for Chapter 11 Bankruptcy.
In a press release Sunday, the company stated it has lost 90% of its passenger revenue from all three airlines, Ravn Air, PenAir and RavnAir Connect.
They will also temporarily lay off all remaining staff "until the company is in a position to cover the costs of rehiring, resuming flights, and operating to the many communities it serves throughout our State," according to the press release.
Ravn will park all 72 of its aircrafts and has also "filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware."
This will allow the airlines to "hit pause" until they can receive the financial assistance to get through the COVID-19 pandemic and begin operations again.
Ravn has been in contact with other airlines around Alaska to "establish new or replacement air service wherever possible." according to the press release.
20 March 2020
Compass Airlines to cease operations from 7th April 2020
News reports state that Compass Airlines, a regional carrier that flies for both Delta Air Lines and American Airlines, has announced that it will cease operations from April 7.
The company said Thursday that it is shutting down as demand suffered a significant drop, due to the public concern and fear derived from the coronavirus crisis.
The carrier was already set to finalize its contract with Delta, but the demise of the whole industry was simply too much to take for the company. Just a few weeks back, Compass’ parent industry Trans States Airlines announced that it would be closing after United decided to not move forward with a new contract.
Rick Leach, CEO of Trans States Airlines, told employees that the coronavirus presents “insurmountable obstacles” and that “the impact of this global crisis is real and unfortunately, no carrier, mainline or regional, is immune from its reach.”
“It’s difficult to articulate or even comprehend the speed at which the coronavirus has changed our industry and our world, and the impact it has had on our company,” Leach continued.
“As difficult as this news is to process, we must conclude these last weeks of our operation with the same commitment to safety, quality and professionalism that have become synonymous with the Compass name. Take care of yourselves and each other in the weeks ahead,” he concluded.
6 March 2020
Airlines face $100 billion-plus loss
News reports state that the coronavirus epidemic could rob passenger airlines of up to $113 billion in revenue this year, an industry body warned on Thursday, while the head of Southwest Airlines said a drastic drop-off in travel demand seemed fear-driven, similar to the feeling after Sept. 11, 2001.
“We could discount prices tomorrow and it wouldn’t do any good,” Southwest Airlines Co (LUV.N) Chief Executive Gary Kelly said at an aviation conference in Washington.
Earlier, Kelly told CNBC: “9/11 wasn’t an economically driven issue for travel, it was more fear, quite frankly, and I think that’s what’s manifested this time. I think there’s elements of both but it has a 9/11-type feel.
“Hopefully, we’ll get this behind us quickly.”
5 March 2020
Flybe collpases
News reports state that Flybe, Europe’s largest regional airline, has collapsed into administration less than two months after the government announced a rescue deal.
The impact of the coronavirus on flight bookings proved the last straw for the Exeter-based airline, which operates almost 40% of UK domestic flights, as the government stalled on a controversial £100m loan.
The UK Civil Aviation Authority announced early on Thursday morning that the airline had entered administration.
It said all flights were cancelled and urged passengers not to go to airports.
All Flybe flights are cancelled. Please do not go to the airport as your Flybe flight will not be operating.
For flights operated by franchise partners, passengers should make contact with their airline.
Flybe’s bankruptcy has come just a week before a budget that it hoped would help bolster its precarious finances, after the previous chancellor said he would look again at levels of air passenger duty (APD) .
However, the airline’s owners Connect Airways – a consortium of Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital – have pulled the plug, a little over a year after buying it.
The airline employed more than 2,000 people and was one of the leading carriers at airports including Belfast, Southampton, Manchester and Birmingham. Around 8 million people a year used its services. Unions have warned that other jobs would be put at risk by Flybe’s collapse, and transport links lost on dozens of domestic routes where it is the sole operator.
Flybe has long struggled to balance the books, despite cost-cutting plans and redundancies, and was reporting losses of around £20m a year before the Connect takeover.
Quick guide
What are your rights when flights are cancelled or delayed ?
With the new government having promised to “level up” the economy, it was anxious to demonstrate it was helping the ailing airline and ministers announced the Flybe rescue in January. However, the measures – which included some deferral of tax, a potential loan, and promises to review regional air connectivity and APD levels – have not proved enough.
Public anxiety and curbs on business travel due to the coronavirus outbreak have forced airlines around the world to retrench in the face of falling bookings, and Flybe was also suffering from the drop in demand.
Virgin Atlantic itself is having to make significant cuts, and earlier on Wednesday announced it was putting in place crisis measures – including cutting executive pay, freezing hiring and pay rises, and offering unpaid leave to staff – as bookings at the airline have fallen by almost 50% in the last week due to Covid-19 fears.
The government has been unwilling to bail out Flybe, despite calls from unions and MPs in the regions, with other airlines, led by British Airways owner IAG and Ryanair, objecting about the prospect of state aid and threatening legal action.
It is the second major British airline to go bankrupt in six months, following the collapse of Thomas Cook last September. So what rights do Flybe's customers have?
Will I lose my flight booking?
Yes, the collapse of an airline means planes are grounded and services are cancelled.
There are no alternatives for most people other than to book another flight.
The Civil Aviation Authority stepped in to help people get home following the collapse of Monarch and Thomas Cook, on the direction of the government, even though under the strict letter of the regulations it did not always need to.
Will the cost of that flight be refunded?
A refund from the airline is highly unlikely. The majority of Flybe travellers bought flight tickets separately, not as part of a package holiday.
That means most will have to rely on a refund from their credit or debit card provider, or possibly by claiming from their travel insurance.
But didn't Thomas Cook customers get a refund?
Many of those who had bought a holiday from Thomas Cook but found it was cancelled when the travel company collapsed were covered by the Atol scheme.
Those in that situation were refunded under the scheme. However, relatively few customers of Flybe have booked full package holidays.
Buying a flight and hotel separately means the threat of losing the money paid for both.
Experts say it is a good idea to explain the situation to the accommodation provider and checking to see if they have any flexibility - either a refund, or different dates for a stay if an affordable flight with another carrier cannot be found.
How likely is my insurer to cover the cost of flights and accommodation?
That all depends on the type of travel insurance policy that has been bought.
Nearly half of travel insurance policies have scheduled airline failure cover, with another 9% having it as an optional add-on which costs extra, according to figures compiled earlier this year by data analysts Defaqto.
That leaves 42% of policies without such cover, so these people would not be able to make a claim.
One benefit of cover, according to Brian Brown of Defaqto, is that the insurer should be able to find a replacement flight with another carrier - something that would inevitably become more expensive after a rival's collapse.
What is the credit or debit card option?
Anyone who paid more than £100 on flights directly with the firm on a credit card should be able to claim a refund from their card provider. This is known as section 75 protection and is part of the Consumer Credit Act.
For cheaper purchases, or if a debit card was used, then customers can try claiming from the card provider under the chargeback system, although this is not a legal right and not always successful.
26 February 2020
SAS Airlines higher losses
News reports state Scandinavian airline SAS on Wednesday reported a bigger pretax loss for its fiscal first quarter than a year earlier but kept its profitability forecast for the full year despite the coronavirus outbreak.
“As long as the COVID-19 outbreak is contained in scope and the suspension of flights is isolated to the winter season, this should only have a marginal impact on our earnings,” SAS CEO Rickard Gustafson said in a statement.
The company is targeting an adjusted operating margin for 2020 of 3-5%.
The loss before tax in the November-Janaury quarter rose to 1.09 billion Swedish crowns ($112.08 million) from 576 million in the year-earlier quarter.
18 February 2020
Cathy Pacific issues a profit warning
News alerts state that Cathay Pacific, Hong Kong’s flag carrier airline, has issued a profit warning after the coronavirus outbreak forced it to cancel two in every five flights for February and March.
The Covid-19 virus had by Sunday infected 51,857 people worldwide, killing 1,669, according to the World Health Organization.
Efforts to contain the virus have caused large parts of the economy in China, where the outbreak originated, to grind to a halt and businesses across the world are still assessing the potential financial cost amid continued uncertainty.
For Cathay, the virus marks another blow after a torrid 12 months in which the street protests in Hong Kong had already caused major traffic declines. Traffic to Hong Kong fell by 46% year on year in November and December, a steeper drop than the 40% seen in January, when the virus was first identified.
The airline had already asked its 27,000 employees to take unpaid leave to help reduce costs and it faces the prospect of months of disruption ahead. Cathay had cut 30% of flights before Monday’s announcement.
Ronald Lam, the airline’s chief customer and commercial officer, said: “This was the most challenging Chinese new year period we have experienced. As the novel coronavirus outbreak in mainland China intensified towards the end of the holiday period, travel demand dropped substantially.”
Travel bans imposed by many governments across the world resulted in continued cancellations by passengers. The airline said cuts to flight numbers were likely in April as well.
The airline’s overall traffic fell by 3.1% in January but performance “deteriorated rapidly” in the last week of the month, when the severity of the outbreak became clear.
17 February 2020
Atlas Global Airlines files for Bankruptcy
New reports state that Turkey's Atlas Global Airlines filed for bankruptcy and all its flights have been canceled, the country's civil aviation authority said on Feb. 14.
The Directorate General of Civil Aviation (DGCA) said in a tweet that the private airline filed for bankruptcy because it could not continue its operations.
The airline had temporarily suspended its flights and resumed operations in December.
Launched in 2001, the airline which flew to 18 destinations, was facing financial troubles since 2018.
11 February 2020
Italy's second largest carrier Air Italy collapses
News articles state that Air Italy, formerly Meridiana, will be placed in liquidation after two years of heavy losses, shareholders announced after an emergency meeting on Tuesday.
In a statement, co-owners Alisarda and Qatar Airways said that passengers booked to travel up until February 25th could expect to fly as scheduled, while passengers with bookings further ahead would receive a full refund.
Investors had big plans for Air Italy when it re-launched in February 2018, the result of a fusion between Sardinia-based Meridiana and the original Air Italy, a smaller carrier headquartered in Milan.
Hoping to replace Italy's bankrupt flag carrier Alitalia, the airline practically doubled its fleet, moved its international hub to Milan and added new long-haul flights to New York, Miami, Bangkok, Delhi and others.
But the rapid expansion didn't pay off and Air Italy reported losses of €164 million in 2018. In 2019, the airline began scrapping some of the international flights it had introduced just months earlier.
Its shareholders, Qatar Airways with 49 percent and Alisarda, a holding company for the Aga Khan IV, the millionaire religious leader Prince Shah Karim Al Hussaini, with 51 percent, had been due to meet next week but abruptly brought the talks forward.
The Italian transport ministry had requested an emergency meeting with Air Italy's owners, with Minister Paola De Micheli saying: "Deciding to liquidate a company of this size is unacceptable without first informing the government and without seriously considering possible alternatives."
18 December 2019
Fly Jamaica files for Bankruptcy
News reports state that Former employees of Fly Jamaica Airways are losing hope they will be paid millions of dollars in salaries owed prior to the problem plagued airline ceasing operations in March this year.
They say the prospect of payment is looking dim now that Fly Jamaica has applied for bankruptcy protection.
One of the airline's former employees, Opal Crosdale, says the recent announcement that Fly Jamaica had been purchased by a team of investors also provided the workers with little comfort.
"That fell to nothing, nothing came of it. And we've now seen where the company has filed for bankruptcy protection, so we're just looking at it to say that everything is lost," he lamented.
Mr. Crosdale told RJR News that the former Fly Jamaica employees are now looking at their options. However, he did not give details.
12 December 2019
Far Eastern Air Transport (FAT) to cease operations
News reports state that Taiwanese carrier Far Eastern Air Transport (FAT) has suspended ticket sales and will cease operations on Friday.
Following initial media reports citing internal documents, the airline has since publicly confirmed this action via a note on its website.
1957-founded FAT is one of the few airlines in the world still operating the McDonnell Douglas MD-82 and MD-83. Its fleet consists of six MD-80 family aircraft, along with six ATR 72 turboprops. Eleven 737 MAX 8 were on order to replace the around 25 year-old MD-80s.
This is not the first time the airline is ending its flight operations. In 2008, the Civil Aeronautics Administration (CAA) of Taiwan (Republic of China) suspended FAT’s operating permit due to financial difficulties and a resulting bankruptcy proceeding. The carrier came back and relaunched flights in 2011.
6 December 2019
Air India record net loss
News reports state that Air India Ltd plunged to a record net loss underscoring an intensely competitive domestic aviation market and adding strength to calls for privatizing the national carrier.
The New Delhi-based carrier posted a provisional net loss of ₹8,556.35 crore in 2018-19, civil aviation minister Hardeep Singh Puri told the Lok Sabha on Thursday. It had a net loss of ₹5,348.18 crore in the previous year.
Accumulated losses at Air India have swelled to about 69,575.64 crore in the past decade, Puri said.
Air India, which is surviving on a taxpayer bailout, has never seen a profit since its merger with Indian Airlines in 2007-08.
Last week, Puri informed the Rajya Sabha that the airline might have to shut down if the government’s second attempt to privatize it fails.
5 December 2019
SAS warns of higher losses
News reports state that Scandinavian airline SAS said on Thursday it expected losses to deepen in the first quarter of next year, sending its shares down 13% despite a rise in fourth-quarter profit.
The company said it expected a bigger loss for the first quarter compared to last year because of challenging market conditions.
SAS has been restructuring and making cost savings to cope with rising fuel costs and competition from the likes of Norwegian Air and Ryanair.
SAS's full-year result was hit by higher the jet-fuel costs, unfavourable currency movements and a strike. It said that an uncertain economic outlook and a slowdown in key economies would negatively impact customer demand.
"The continued weakness of the Swedish and Norwegian krona against the U.S. dollar and the euro also remains a challenge," SAS said in its results statement.
5 December 2019
South African Airways put in Bankruptcy Protetcion
News reports state that South Africa’s government will place the national airline under a local form of bankruptcy protection as a last-ditch measure to try and prevent its total collapse.
State-owned South African Airways is entering a business-rescue process to allow a “radical restructuring” under which the carrier will receive 4 billion rand ($274 million) in funding, Public Enterprises Minister Pravin Gordhan said in a statement Thursday. The process will allow SAA to continue operating.
“This is the optimal mechanism to restore confidence in SAA and to safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner,” Gordhan said.
SAA, which last made a profit in 2011 and has received 57 billion rand in bailouts since 1994, has been struggling to pay its bills after the National Treasury balked at providing it with more funding. Its finances took a further hit when staff staged a pay strike last month, grounding a number of flights and causing bookings to be canceled on a number of others.
South Africa’s Companies Act enables firms in financial distress to file for business rescue. If granted, a business-rescue practitioner is appointed to help the company reorganize and assess whether it can be turned around. Companies in the process of being rehabilitated are protected from liquidation and legal proceedings, enabling them to keep trading.
13 November 2019
Taron-Avia ceases operations
News reports state that Taron-Avia Airlines has ceased operations, Armenia’s Civil Aviation Committee has revealed. The decision comes after the country’s aviation authorities revoked the airline’s Air Operator’s Certificate (AOC), which was previously suspended following an inspection that revealed operational deficiencies.
16 October 2019
Via Air files for Chapter 11 Bankruptcy
News reports state that Maitland-based airline Via Air has filed for bankruptcy protection after a series of business moves did not allow its operations to restart.
Via Airlines Inc. made the voluntary Chapter 11 filing in Florida Middle Bankruptcy Court on Oct. 8. The company cited both a pilot shortage that reduced business volume and shut down its business last May, as well as a July 2019 deal in which Atlanta-based Ashley Air LLC agreed to buy Via Airlines and infuse it with capital to stabilize it, but Via claimed Ashley Air did not fill its financial duties, according to the filing.
Via Airlines claimed that Ashley Air, headed up by CEO John Ashley, misrepresented its "financial wherewithal," which led to Via defaulting on payments to secured creditors, unpaid rent on airport hangars and the Internal Revenue Service not being paid owed taxes. Via Airlines also claimed that Ashley Air didn't pay employees' wages and didn't reimburse passengers for canceled flights.
11 October 2019
More airlines could go under under in the next few months, according to BA boss
News reports state that more airlines could fail in the coming months as fuel costs remain high and the global economy softens, the boss British Airways has claimed.
The comments come just weeks after the UK's oldest holiday provider Thomas Cook collapsed.
More airlines could go under under in the next few months, according to BA bossCredit: Reuters
Willie Walsh, chief executive of British Airways' owner IAG, said: "In an environment where you are seeing softening economic conditions, where you are seeing fuel prices still in the $60 (£50) range [...] weaker airlines will struggle".
He added Norwegian Air was among those "in a very challenging position" as the airline had "had to sell off the silver [...] for liquidity".
IAG sold its stake in Norwegian after a takeover approach was rebuffed, and Mr Walsh said said it would not bid again.
A spokesman for Norwegian said: "Our results show that we are delivering on our strategy of moving from growth to profitability.
"We continue to focus on building a strong, sustainable and profitable business."
Mr Walsh isn't the only airline boss to suggest Norwegian could be vulnerable.
Ryanair CEO Michael O'Leary claimed the low-cost airline would be the next to go bust earlier this month.
IAG chief executive Willie Walsh claimed Norwegian could be the next to go
IAG chief executive Willie Walsh claimed Norwegian could be the next to goCredit: PA:Press Association
Airlines have struggled due to rising fuel costs.
The cost per barrel has increased from around $30 (£23) in 2016 to $66 (£52) in 2019, according to The Points Guy, making it more expensive for airlines to fly.
Winter is also difficult for carriers, with fewer people travelling abroad leading to lower fare sales.
Competition between low-cost airlines has resulted in a number of airlines going under as they compete to offer the cheapest fares.
This could eventually lead to much higher fares, with Michael O'Leary previously saying he thought the future of flying would leave just "four major carriers" in Europe.
Other airlines to have recently gone bust include Aigle Azur, the second largest airline in France, along with smaller French airline XL Airways.
Slovenian airline Adria Airways also went under earlier this month.
Thousands of Brits were affected by the collapse of Thomas Cook with the rescue mission to bring stranded holidaymakers home said to have cost £100million.
Willie predicted there will be a law change relating to airline failures in the wake of the Thomas Cook collapse so taxpayers don't have to foot the repatriation bill.
Thomas Cook ceased trading with immediate effect on September 23 after the travel firm was unable to pay £200 million to its creditors.
The travel firm's demise sparked the largest peacetime repatriation since World War Two after 150,000 passengers were stranded abroad.
Other airlines to have gone bust in recent years include Monarch Airlines, which collapsed in 2017.
More than 300,000 bookings were cancelled, leading thousands stranded abroad.
Last year Primera Air and Cobalt went under, with WOW Air following this year, although has been rescued since.
If a holiday provider goes into administration, Brits' package holidays are ATOL-protected meaning they will be refunded and brought back to the UK for free.
If an airline goes under, Brits have little protection and could be forced to may for their new flights.
8 October 2019
Peruvian Airilnes ceases operations
News reports state that Peruvian Airlines has become the latest casualty in a plague of operational suspensions and bankruptcies that seems to be sweeping the aviation world. It has now become the fourth airline to succumb to this fate within the past two weeks, after Adria Airways filed for bankruptcy on 30th September.
Communication officials at Peruvian Airlines announced on its website yesterday that all flights would be suspended until further notice. Translating the statement from Spanish, the airline said that the ultimate explanation for ceasing operations was its inability to operate normally, which created:
“a lack of confidence within travel agencies which significantly reduced their sales…”
The reason for mistrust between the agencies and the airline was sparked recently when Peruvian Airlines was forced to abandon operations for half a day on 30th September. This was an issue onset by troubles the airline had faced earlier in the week, regarding the local authorities.
In the press release, the airline blamed a “lack of liquidity” as the reason for its demise. Authorities shut off access to Peruvian Airlines’ bank accounts earlier this week making it impossible for the airline to access funds.
Peruvian Airlines claims that its accounts were frozen as a penalty for unlawful action “due to the valuation difference in the temporary importation of 2 commercial aircraft”. It declared a lower and therefore incorrect, invoice on these two aircraft to the National Superintendence of Customs and Tax Administration (SUNAT) who then took action to suspend the airlines’ funds.
The funding issues not only caused disruption for travel agencies during the half-day service cancellations but also meant that Peruvian Airlines couldn’t keep on top of its operating costs. It was also unable to pay its fuel providers.
Operating costs were unfulfilled due to frozen bank accounts. Peruvian Airlines said that it could not recuperate itself from this situation and had unfortunately been forced to cease operations until further notice. There will be no more services flying from its Lima base.
1 October 2019
IATA CEO talks of a fragile airline industry
News reports that International Air Transport Association (IATA) chief executive Alexandre de Juniac says recent airline collapses highlight the fragile nature of the aviation industry.
High-profile operators who have ceased operations over the past 12 months have included Germany’s Germania, Icelandic airline Wow Air in March and India’s Jet Airways in April.
And September was a particularly brutal month, with UK-headquartered Thomas Cook, France’s Agile Azur and Slovenian flag carrier Adria Airways folding.
Meanwhile, Avianca Brasil filed for bankruptcy protection in late 2018 and was shut down in June 2019.
de Juniac said its was “always a concern” when airlines were in bankruptcy or collapsing.
“What it shows is that our industry is fragile,” de Juniac told reporters during a conference call on September 24.
“We are not a high margin industry , we are a exposed to a lot of risk, including financial and economic risk.”
The recent volatility in oil prices, as well as economic challenges such as trade tensions between China and the United States, has meant difficult operating conditions for airlines.
And with little sign of a turnaround, this suggested downward pressure on IATA’s profit projections.
“I have to recognise that the trend is probably more in the declining than in the increasing mode,” de Juniac said.
30 September 2019
Adria Airways files for bankruptcy
News reports state that the bankruptcy of Adria Airways seems the only possible scenario after the Slovenia-based airline cancelled most of its flights since last Tuesday, Slovenian Economy Minister Zdravko Pocivalsek said on Monday.
He said the government was considering establishing a new airline company which will improve Slovenia’s international connections after the collapse of Adria, which is owned by German investment firm 4K Invest.
24 September 2019
Adria Airways suspends operations
News reports state that the national flag carrier of Slovenia, Adria Airways, has announced that the airline will not commence flight operations on September 24 and September 25, 2019, because it needs “access to fresh cash which airline needs for further flight operations”. Adria will resume flights if a solution can be found “in cooperation with potential investor”, according to the airline. Adria Airways will only operate one-way flights from Frankfurt Airport (FRA) to Ljubljana, Slovenia (LJU) and back on both days.
The current financial situation, repossessed aircraft, unsuccessful privatization and struggles to stay afloat due to unfavorable market conditions seem to have put Adria Airways’ under a lot of financial stress, as it was forced to cancel almost all flights for two days.
23 September 2019
Thomas Cook Airlines collapses after 178 years of trading
New reports state that Thomas Cook has collapsed after last-minute negotiations aimed at saving the 178-year-old holiday firm failed.
The UK Civil Aviation Authority (CAA) said the tour operator has "ceased trading with immediate effect".
It has also triggered the biggest ever peacetime repatriation, aimed at bringing more than 150,000 British holidaymakers home.
Peter Fankhauser, Thomas Cook's chief executive, said the firm's collapse was a "matter of profound regret".
Commenting as the company entered compulsory liquidation, Mr Fankhauser also apologised to the firm's "millions of customers, and thousands of employees".
The tour operator's failure puts 22,000 jobs at risk worldwide, including 9,000 in the UK.
Thomas Cook: Much-loved brand with humble roots
'Planes already being impounded'
Thomas Cook customers 'will not be stranded'
Transport Secretary Grant Shapps said the company's collapse was "very sad news for staff and holidaymakers".
He urged holidaymakers to be "understanding with staff" amid the "enormous" task of bringing people home.
Mr Shapps has announced that the government and CAA has hired dozens of charter planes to fly customers home free of charge.
The emergency operation, codenamed Operation Matterhorn, is aiming to bring home Britons currently on holiday with the firm.
On Sunday, empty aircraft had already started to be flown overseas, ready to bring British tourists back to the UK on Monday.
One of the world's best known holiday brands, the business was founded in 1841 in Leicestershire by cabinet-maker Thomas Cook.
Presentational grey line
How will holidaymakers get home?
All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home "as close as possible" to their booked return date, the Department for Transport (DfT) has said.
Customers will be brought home to the UK on special free flights or booked onto another scheduled airline at no extra cost.
Flights will start operating from Monday, with details of each flight to be posted on a dedicated website as soon as they are available.
The DfT added that a "small number" of passengers may need to book their own flight home and reclaim the costs.
Customers have been urged not to cut short their holiday or go to the airport without checking the website for more information about their return journey.
The CAA is also contacting hotels accommodating Thomas Cook customers, who have booked as part of a package, to tell them that the cost of their accommodation will be covered by the government, through the Air Travel Trust Fund and Air Travel Organiser's Licence scheme (Atol).
Presentational grey line
The CAA said in a statement: "All Thomas Cook bookings, including flights and holidays, have now been cancelled.
"We know that a company with such long-standing history ceasing trading will be very distressing for its customers and employees and our thoughts are with everyone affected by this news."
Tim Johnson, policy director of the CAA, told BBC News it has chartered "more than 40" aircraft, which are already in position, to bring passengers home.
He urged customers in the UK who were due to travel not to go to the airport "because very sadly your flight has been cancelled".
Mr Johnson added: "For those who have not yet started their holiday, we will be publishing details of how they can claim a refund on the website, no later than next Monday."
Business Secretary Andrea Leadsom has said she will write to the Insolvency Service urging them to "fast-track" their investigation into the circumstances surrounding Thomas Cook going into liquidation.
* People with either Scheduled Airline Failure Insurance or End Suppliers Failure Insurance with IPP and had not booked a package with their flight should refer to our claims section for further information.
16 September 2019
Thomas Cook shares noesdive amid rumours of imminent collapse
News reports state that The world's oldest travel agent is currently trying to secure support for a £900mln rescue deal to stave off insolvency after a string of profit warnings and a cash crunch
Shares in Thomas Cook Group PLC (LON:TCG) made a sharp descent on Monday after weekend press reports said industry regulators were on alert for the travel firm’s imminent collapse.
A report from The Sunday Times said the Civil Aviation Authority (CAA) was on alert over the possibility that it may have to repatriate millions of Thomas Cook passengers in the event the firm went bust.
3 September 2019
Aigle Azur Frances second largest airline files for bankruptcy
News reports state that France’s second-largest airline, Aigle Azur, went into receivership after filing for bankruptcy Monday, following years of losing millions of euros, France’s civil aviation authority (DGAC) said.
“The Aigle Azur airline was today placed in receivership,” the authority said in a statement, citing “several months of cash flow problems.
It said the government was “mobilized to seek the best solution to preserve jobs and ensure the continuation of economic activities,” it said.
The move comes after a shareholder coup ousted chief executive Frantz Yvelin last week, accusing him of making “strategic mistakes over the past two years.”
Destinations in Algeria make up half of Aigle Azur’s operations, and the company posted revenues of €300 million ($329 million) last year after transporting some 1.9 million passengers.
But it wasn’t enough to stem heavy losses that last month prompted the airline to announce plans to sell its Portugal routes to low-cost rival Vueling.
“Aigle Azur is in cession of payments after several years of drifting because of numerous improper strategic decisions, and must ask for commercial court protection,” employees said in a statement after a meeting with management.
Bankruptcy protection would allow the airline, which has 1,150 employees, including some 350 based in Algeria, to continue operations.
Chinese conglomerate HNA Group, which owns Hainan Airlines, is the largest stakeholder, with 49 percent.
David Neeleman, an American airline entrepreneur whose companies include JetBlue and TAP Air Portugal, owns 32 percent, and French businessman Gerard Houa owns 19 percent.
“We hope most of all there will be a buyer,” said Lilas, a flight programmer who was among several dozen employees who gathered outside the airline’s headquarters at Paris’ Orly airport.
“It’d be a shame to lose an airline that has 300 million euros in sales and has landing slots in Algeria that even Air France doesn’t have,” she added, declining to give her last name.
30 August 2019
Kenya Airways troubles continue as loss doubles
News reports state that Kenya Airways, which is being renationalised to save it from mounting debts, saw its first-half pretax loss more than double from a year earlier to Sh8.56 billion, its results statement showed on Tuesday.
Parliament voted in July to renationalise the loss-making airline, which is labouring under a mountain of debt and has had three changes of chief executive in the past five years as it struggles to compete with regional rivals.
The government plans to buy out minority shareholders including Air France-KLM’s 7.8 per cent stake.
The carrier said its first-half revenue rose 12.2 per cent from a year earlier to 58.55 billion shillings, which Chief Financial Officer Hellen Mathuka attributed to the launch of new routes and more frequent flights.
However, the airline’s operating costs rose to 61.45 billion shillings, from 53.22 billion shillings in the same period last year, Mathuka said. That was partly due to two Boeing 787 planes that had been sub-leased to Oman Air being returned during the first half of the year, she said.
28 May 2019
SAS losses more than double
News reports state that Scandinavian airline SAS warned it would struggle to meet its full-year results forecast after posting a sharp rise in second-quarter pretax losses on Tuesday, as it counted the cost of a recent strike by pilots.
The carrier, which is still partly owned by Sweden and Denmark while Norway has sold its entire stake, had previously guided for a positive full-year result before tax and non-recurring costs.
Struggling with high fuel prices and cut-price competition from the likes of Norwegian Air and Ryanair, SAS is renewing its aging fleet and has been restructuring for years to slash costs.
It cancelled around 4,000 flights between April 26 and May 3 as pilots demanding better pay and working conditions went on strike, disrupting the travel plans of 370,000 customers.
The company on Tuesday estimated the cost of the strike at 650 million Swedish crowns (53.5 million pounds), with 430 million of that related to the last five days of the second quarter.
SAS shares were down 6% at 0843 GMT, taking year-to-date losses to 34 percent.
CEO Rickard Gustafson said he was now looking into more restructuring for 2020 and 2021, to follow an ongoing programme.
17 May 2019
Virgin Australia's share price hammered by expect A$35.6 million loss
News reports state that Virgin Australia's share price has been hammered after the airline announced it expects to post a full-year underlying earnings loss of at least A$35.6 million (NZ$37.5 million).
The airline blamed "fuel and foreign exchange headwinds" for the earnings downgrade, and warned weak demand could cause the loss to blow out even further. Virgin posted a A$64.4m underlying profit last financial year, but expects underlying earnings will be down at least A$100m for the year ending June 30.
Virgin's shares tumbled when the Australian market opened and by late morning were 8.1 per cent lower at A$0.17.
18 April 2019
Jet Airways temporarily suspends all flights
News reports state that Jet Airways has temporarily suspended all flights.
Interim advice to Consumers
Jet Airways have this evening advised that all International & Domestic flights have been ‘temporarily suspended’ while they await the final bids of interest by State Bank of India (SBI), on behalf of the consortium of Indian Lenders. The bid process will conclude on the 10th May and the final decision to trade will we expect be made.
Here is a copy of Jet Airways statement.
https://www.jetairways.com/information/press-release-apr17-1.html
Although flights have been suspended, Jet Airways have also given advice on assistance with delayed and cancelled flights. In the first instance passengers should refer to their travel agent for further advice and help especially if the flight was bought as part of a package, then in that case they should be entitled to a refund or a replacement flight. If a flight was booked directly with Jet Airways they are offering refund assistance.
Details of this statement are as follows: -
https://www.jetairways.com/information/disruption-assistance.aspx
Passengers with International Passenger Protection Scheduled Airline Failure Insurance (SAFI) or End Supplier Failure Insurance (ESFI)
Due to operations being temporarily suspended, Jet Airways has not permanently stopped operations and therefore continues to trade and as such the current disruption is not something that is covered by your policy. However we are monitoring this position on a daily basis and of course the deadline of the 10th May as above will define this decision going forward. Therefore in the first instance Insured’s should follow the advice as above and if unsuccessful please then make a claim under the SAFI or ESFI section of the policy so it can be considered with written evidence of rejection to refund.
As soon as developments change a further update will be issued.
If you have a Travel Insurance Policy that includes either SAFI or ESFI through International Passenger Protection Limited (IPP) then please use the following contact details below if you still wish to make a claim, you can also make a claim online;
Please note in the first instance you will be expected to refer to your Bank or Credit Card provider. If you are unsuccessful then please obtain refusal confirmation as part of your claim.
16 April 2019
Lufthansa reports worse loss than expected of Euro 336 million
News reports state that Lufthansa reported an operating loss of 336 million euros (£290.4 million) for the first three months of the year, hurt by rising fuel costs and overcapacity in Europe, sending its shares down 5 percent in pre-market trade.
Germany's biggest airline said late on Monday that a 202 million euro rise in fuel costs had contributed to the loss, while unit revenues at Lufthansa's airlines, which include SWISS and Austrian Airlines, as well as budget carrier Eurowings, fell significantly in the period.
The fall in earnings was accentuated by a tough comparison with the previous year when Lufthansa benefited from lower capacity due to the insolvency of Air Berlin, it said.
Lufthansa reported an operating profit of 52 million euros for the same period a year earlier.
Shares of the airline, which have risen around 12 percent since the start of the month, were indicated to open 5.1 percent lower in premarket trade on Tuesday morning at 0606 GMT.
Lufthansa's loss follows a bleak trading update from British rival EasyJet, which said on April 1 it expected to report a 275 million pound loss in the six months to the end of March.
European airlines are battling overcapacity and high fuel costs, while uncertainty around Brexit has led to some travellers to delay booking summer holidays.
Iceland's WOW air was the latest casualty in March, halting operations and cancelling all future flights after failing to raise more funds.
10 April 2019
Virgins second consecutive loss
News reports state that VIRGIN Atlantic has posted its second consecutive year in the red as the airline was hit by the Brexit-hit pound, economic uncertainty and engine woes.
The carrier - founded by Sir Richard Branson - posted a statutory loss of £38.9 million in the year to December 31, which compares to £65.5 million in 2017.
Stripping out exceptional items, the firm posted a £26.1 million loss.
Its performance was dragged down by "softer consumer demand" linked to economic uncertainty and the weakness of the pound versus the dollar following the Brexit vote, which has knocked demand from UK travellers.
As well as sterling woes, the group was impacted further by faults with Rolls-Royce Trent 1000 engine parts, which led to some of its Boeing 787 Dreamliners being grounded.
The issue has impacted upon a raft of airlines, including British Airways.
Chief executive Shai Weiss said: "While a loss is disappointing, our performance has improved in 2018 despite challenging economic conditions and put us on a trajectory for growth and return to profitability.
"And, the acquisition of Flybe will secure the future of Europe's largest regional airline, extending the Virgin Atlantic experience and delivering more choice for customers connecting from the UK and Europe on to our long haul network."
As part of the Connect Airways consortium, Virgin recently bought Flybe.
2 April 2019
Fly Jamaica ceases operations
News reports state that the Jamaica-based Fly Jamaica Airways says it is making all staff redundant as of Sunday saying the lack of planes to carry out operations has left it without any other alternative.
In a letter dated March 29, signed by chairman and chief executive officer, Paul Ronald Reece, the airline, which has been trying to recover after one of its planes crash landed at Guyana’s Cheddi Jagan International Airport in November 2018, said it wanted to thank employees for their “service, loyalty and dedication.
“The Board of Directors of Fly Jamaica Airways regrets to inform you that due to our lack of aircraft and the impact that it has had on the Company’s financial position, we have no alternative but to make all employees redundant effective March 31, 2019,” Reece wrote in the letter.
“It is with great sadness and remorse that we have arrived at this juncture. We were hoping for funding, but that has been slow in coming, therefore for the time being no other resource or options exist,” he added.
28 March 2019
WOW collapses leaving thousands stranded abroad
News reports state that Wow Air has closed down, leaving thousands of passengers stranded – and wrecking the travel plans of hundreds of thousands more.
The troubled Icelandic airline was heavily in debt and has been seeking a backer for months. Talks with a US financier and the rival carrier, Icelandair, broke down in the past few days.
As dawn broke at Keflavik airport outside Reykjavik, the airline announced it was “in the final stages of finalising equity raise with a group of investors”.
All of Thursday’s flights were cancelled “until documentation with all parties involved have been finalised”.
But that was an empty promise; by 8.18am GMT the airline announced: “End of Operation of Wow Air.
“Wow Air has ceased operation. All flights have been cancelled.
“Passengers are advised to check available flights with other airlines.
“Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances. Information on those airlines will be published, when it becomes available.
“Passengers whose ticket was paid with a credit card are advised to contact their credit card company to check whether a refund of the ticket cost will be issued.
“Passengers who bought their ticket from a European travel agent (within the European Economic Area) as a part of a package tour (a package which includes flights and accommodation or other services) are protected by the Package Travel Directive. Those passengers are advised to contact their travel agent to arrange an alternative flight.
“Passengers who may have bought travel protection, or those passengers whose credit card terms may include such protection, may be entitled to claim compensation and assistance due to delays or travel disruption. However, such compensation is often limited.
“In case of a bankruptcy, claims should be filed to the administrator/liquidator.”
The airline may have some value in the slots that it owns, but its brand value has collapsed over the past days and weeks.
18 March 2019
Etihad records $1.8bn loss in 2018
News reports state that Etihad Airways is facing the biggest crisis in its history after the Emirati company reported losses for the third consecutive year.
The Abu Dhabi based company said in a statement that total revenues fell by 2.4 per cent in 2018 to reach $5.86 billion, down from $6 billion in 2017.
It added that the number of passengers decreased from 18.6 million in 2017 to 17.8 million in 2018.
In 2018, the company suspended flights to the Iranian capital Tehran, Jaipur in India, Entebbe in Uganda, America’s Dallas and Fort Worth, the capital of Bangladesh Dhaka, Dar es Salaam in Tanzania and Scotland’s Edinburgh. It also suspended flights to and from Qatar after the UAE launched a blockade on its Gulf neighbour in June 2017.
The company also faces a €2 billion ($2.27 billion) compensation lawsuit filed by German carrier Air Berlin’s insolvency administrator. Air Berlin claims that Etihad did not fulfil its financial obligations when it withdrew its funding to the now defunct carrier. The Abu Dhabi-based airline was the main shareholder in Air Berlin, which declared insolvency in August 2017.
1 March 2019
Air Asia loss
News reports state that AirAsia Group Bhd flipped to a net loss in the fourth quarter, its first quarterly loss in more than three years as higher fuel prices and operating lease costs dented income.
To boost revenue, the chief executive of Asia's largest budget carrier said the group would step up efforts to sell more travel services on its website when customers booked flights.
AirAsia posted a bigger than expected loss of RM395 million (S$131m) for the period, versus a RM372.6m profit a year earlier. Refinitiv data showed one analyst had forecast a RM63.2m loss.
Malaysia's flagship budget carrier said in a stock exchange filing that fuel consumption rose 12 per cent and its average price climbed 33 per cent to US$92 (S$124) a barrel in the three months to Dec 31. Fuel costs rose 48 per cent to RM1.1 billion.
Operating lease expenses rose 115 per cent to RM413.4m, after AirAsia sold and leased back aircraft.
Revenue grew 6.2 per cent to RM2.82 billion, as total passengers carried by the airline swelled 16 percent to 12.1 million, although this trailed a 21 per cent capacity increase.
The passenger load factor for the period, a measure of how full planes are, fell 4 percentage points to 84 per cent.
The airline said the rise in fuel costs had a major impact, saying it had hedged 52 per cent of its 2019 needs at US$63.41 a barrel for Brent. - REUTERS
23 February 2019
Air Arabia posts $83.5 million loss
News reports state that Air Arabia will report an accumulated loss of AED 307 million ($83.5 million) due to its exposure to embattled private equity firm Abraaj, the company said in a statement on Wednesday.
In June, Air Arabia disclosed that it had an exposure of $336 million to Abraaj through fund portfolios and short-term loans.
“The carrier will report an accumulated loss of AED 307 million, subject to ratification by Air Arabia shareholders at the company’s annual general meeting,” the company statement said.
The statement added that “while Air Arabia’s liquidity status and profitable operations remain intact, this step aims to serve the best interests of the company and its investors.”
In January, Air Arabia announced it had filed a misdemeanour case against Abraaj founder Arif Naqvi. The move followed earlier arbitration proceedings that took place in July.
The private equity firm is currently undergoing a court-supervised restructure and is trying to sell off parts of the business to repay its debt.
22 February 2019
FlyDubai $43.5 million loss
News reports state that Flydubai on Wednesday announced that it saw an annual loss of $43.5 million despite a better second half of 2018 which saw a profit of $43 million.
The low-cost airline posted a 12.4 percent rise in revenue to $1.7 billion, adding that total annual operating cost included a price impact of $112 million in fuel costs.
It added that 11 million passengers travelled across the flydubai network, a moderate year on year increase, while it took delivery of a total of seven new Boeing 737 MAX 8 and MAX 9 aircraft during 2018.
Ghaith Al Ghaith, CEO of flydubai, said: “In line with expectations 2018 was a challenging year however we have continued to invest in our capacity and increased revenue.
"We optimised our network by increasing flight frequencies on existing routes and adding new routes and as they become established they will support our further growth.”
Francois Oberholzer, chief financial officer of flydubai, added: “Our performance in 2018 was impacted largely due to increasing fuel costs, rising interest rates and unfavourable currency exchange movements. Following our half-year results, we continued to focus on further efficiency programmes across the business and these have resulted in a better second half. The emphasis we have put on these programmes is expected to result in an improvement to our financial performance.”
Fuel costs were 29.8 percent of total annual operating costs; compared to 25 percent for the same period a year earlier.
16 February 2019
FlyBMI collpases
News reports state that hundreds of passengers have had their travel plans disrupted after airline Flybmi suspended all flights and said it was filing for administration. Flybmi said it would not be able to purchase, rearrange or reschedule any flights on behalf of customers. Customers of the airline, which had operated 17 regional jet aircraft on routes to 25 European cities, have been told not to come to the airport unless they have rebooked flights with alternative providers.
FlyBMI is not linked to Flybe whom are still trading.
14 February 2019
Jet Airways posts a US$82 million loss
News reports state that Jet Airways reported Rs 587.7 crore standalone net loss for the third quarter ended December 31, 2018. It had reported a net profit of Rs 165.25 crore during the year-ago period.
"Despite improvement in RASK (revenue per available seat kilometre), which grew 2.6 per cent over Q3FY18 due to seasonal, demand-led strengthening of fares, higher costs because of the price of Brent crude (up 29 per cent year-on-year) and the depreciated Indian rupee impacted the airline's overall business performance," the company said in a statement.
"These factors ensured that the sequential reduction in non-fuel CASK (cost per available seat kilometre) over the last few quarters could not be sustained. For Q3FY19, Jet Airways' non-fuel CASK increased by 13.7 per cent on a year-on-year basis to Rs 3.43 crore. Excluding forex impact, non-fuel CASK increased 7.5 per cent," it said.
On a consolidated basis, the airline's net loss stood at Rs 732 crore for Q3FY19, against a net profit of Rs 186 crore in the year-ago quarter.
14 February 2019
Avolon chief warns of more airline collapses
New reports state that there will be more airline failures this year despite continuing robust demand, according to the head of Avolon, one of the world’s largest aircraft leasing companies.
“We are feeling that, while there continues to be demand and airlines continue to be profitable, we are going to see more airlines fail so therefore we need to be on watch on a global basis for more restructurings and more failures,” said Dómhnal Slattery, Avolon chief executive, in an interview with the Financial Times.
The Dublin-based group, which published its annual industry outlook for 2019 under the headline “Buckle Up” this week, said that too many “cheap seats” were being sold in the market although it stressed that robust aircraft demand would probably re-absorb any excess capacity.
“What I’m seeing at a very strategic level,” added Mr Slattery, is that “the stronger airlines are getting stronger and the weaker airlines are getting weaker faster”.
The past few months have seen a clutch of aircraft failures. German airline Germania collapsed last week because it was unable to secure financing to fund itself after a difficult year.
9 February 2019
Shaheen Airlines closes
News reports state that shaheed-airlineThe Pakistan’s airline industry on Friday suffered another major blow as the country’s second biggest airline Shaheen Air International (SAI) officially announced its closure.
On the behalf of Ehsan Sehbai, former CEO Shaheen Air, Director HR Shaheen Air Imran Aziz informed airline’s employees that the airline had been shut down officially due to unavailability of funds. The airline will soon declare itself bankrupt, added Aziz.
5 February 2019
Korean Air swings to a loss
News reports state that Korean Air Lines Co. said Tuesday it swung to a net loss in 2018 from a year earlier due to hefty foreign-exchange losses.
The South Korean flag carrier posted a net loss of 167.59 billion won (US$150 million), after a net profit of 801.9 billion won a year earlier, the company said in a statement.
As the US dollar rose to 1,118.1 won at the end of 2018 from 1,071.4 won at the end-2017, foreign-exchange translation losses reached 363.6 billion won and it cut into the annual earnings results, the statement said.
Moreover, the won's weakness drove up jet fuel and net interest costs last year. Fuel costs jumped 26 percent to 3.294 trillion won from 2.616 trillion won. And net interest costs rose 14 percent to 454.8 billion won from 399.3 billion won, it said.
Operating profit fell 28 percent to 676.33 billion won last year from 939.78 billion won a year ago. Sales climbed 7.7 percent to 13.024 trillion won from 12.092 trillion won during the same period.
5 February 2019
Germania files for Bankruptcy
News reports state that Berlin-based airline Germania has filed for bankruptcy and cancelled all flights with immediate effect, the company said early Tuesday.
The airline with 37 aircraft had flown mainly Mediterranean, North African and Middle Eastern holiday routes for German sun-seekers on package trips, and said it transported over four million passengers a year.
"Unfortunately, we ultimately failed to successfully complete our financing efforts to meet short-term liquidity needs," said managing director Karsten Balke in a statement.
"We very much regret that, as a consequence, we had no choice but to file for bankruptcy."
The company blamed "unforeseen developments" for its cash shortage such as "steep kerosene price increases over the summer of last year with a simultaneous fall of the euro against the US dollar" as well as a high number of technical services required by its fleet of aircraft.
Ms Balke said that "we especially regret the impact that this step has on our employees", who had done their best to ensure reliable and stable flight operations.
"I thank you all personally and with all my heart. I apologise to passengers who can not take their Germania flight as planned," said Ms Balke.
The ailing company, which had reported financial woes in January, said it had filed for bankruptcy with a Berlin court late Monday and that all flights were halted overnight.
Affected passengers who booked as part of a package holiday were told to contact their tour operator for replacement flights.
"Regrettably, for passengers who purchased their ticket directly from Germania, there is no entitlement to replacement transport due to the current legal situation," the airline said.
The company's subsidiaries Swiss Germania Flug and Bulgarian Eagle were not affected, the statement said.
The small carrier's bankruptcy comes after Air Berlin, formerly Germany's second-largest airline, went bust in 2017 after shareholder Etihad Airways withdrew funding following years of losses.
31 January 2019
Wizz Air profits plunge by almost 90%
News reports state that Wizz Air has revealed its quarterly profits fell by nearly 90 per cent, even though its customer numbers rose sharply.
The Hungarian airline, which operates across Europe including the UK, said its costs jumped by 25 per cent in the three months to 31 December.
The group said that while it has maintained its full-year profit guidance, it is keeping an eye on the UK amid 'Brexit uncertainty.'
Wizz Air said it was granted a UK route licence to enable it to continue flying to non-EU destinations from Britain after Brexit.
It set up Wizz Air UK in May 2018 as part of Brexit contingency plans and said it was granted a UK route licence by the transport minister in its third quarter.
Commenting on the airline's performance, AJ Bell's Russ Mould said: 'Low-cost Hungarian carrier Wizz Air is showing just how precarious the profitability of an airline can be as an increase in staff and fuel costs results in a big drop in third quarter profit.
20 December 2018
LC Peru Airlines forced into liquidation
News reports state that LC Peru has had its licence revoked and forced into liquidation by INDECOPI.
19 December 2018
VLM Brussels files for bankruptcy
News reports that VLM Airlines Brussels has filed for bankruptcy, ending the obscurity of the past weeks. The airline stopped operations earlier this month, as its only aircraft, an Airbus A321-200, was retaken by the lessor on December 8, 2018.
The airline used to operate ACMI and charter flights for Thomas Cook and other clients. A company’s spokesperson is quoted in local media explaining that despite a good performance in summer 2018, the airline was unsuccessful in securing enough funds to survive the winter. Similarly, VLM Airlines (Brussels) CEO Harm Prins reportedly warned last week about then-foreboding bankruptcy if the airline fails to bring in extra money by this week.
The airline employs approximately 80 people, both flight and ground crew.
13 December 2018
Avianca Brasil
News reports state that Brazil’s fourth-largest airline, Avianca Brasil, filed for bankruptcy protection on Monday, saying its operations had been threatened by potential repossession of aircraft, which could prevent the carrier from continuing to operate.
The unlisted airline said in its bankruptcy filing that leasing companies seeking to take back some 30 percent of its all-Airbus fleet threatened its ability to fly some 77,000 passengers in December.
Avianca said in a statement that the bankruptcy filing resulted from a failure to reach a “friendly agreement.” It also said its flights would not be affected.
The aircraft are still under Avianca Brasil’s control for now and it remains unclear what their fate will be as the carrier is asking a Brazilian court to allow it to keep the planes for now.
The airline said in the filing it largely blamed high fuel prices and a strong dollar for its troubles.
29 November 2018
Air2There Airlines files for insolvency
News reports state that New Zealand Regional airline Air2there based in the lower North Island has been placed into receivership and a Piper Navajo plane and two engines have been seized.
The company was set up in 2004 as a city hopper service based at Paraparaumu flying small aeroplanes between Wellington, Masterton, Blenheim and Palmerston North.
28 November 2018
Shares in Thomas Cook tumble after 2nd profit warning
News reports state that shares in Thomas Cook crashed as much as 30 per cent on Tuesday to their lowest point since 2012 after the holiday group issued its second profit warning in two months citing a summer heatwave, tough competition and the impact of airline and hotel failures.
The UK travel agent, which had already revised down its full-year earnings figure by £40m-£50m in September, revealed an additional £30m hit and scrapped its dividend. Its underlying earnings before interest and tax would come in at £250m, it said, £58m lower than last year.
The downgrade reflected “particularly disappointing” late bookings demand, as fewer people — particularly UK customers — travelled during Europe’s prolonged summer heatwave. Profits at Thomas Cook’s tour operator division fell £88m in the year to September as it slashed holiday prices. It said late bookings had not improved in recent months.
The additional £30m hit to earnings was due to writedowns and unexpected costs relating to factors including the closure of UK stores and finding customers new flights after the failure of airlines Air Berlin and Niki.
18 October 2018
German Government warns of more Airline Bankruptcies
News reports state that increasing competitive pressures inside and outside Europe could lead to additional airline restructurings and bankruptcies, the German government said in a response to a parliamentary query that was published on Thursday by the Handelsblatt newspaper.
The government did not comment on whether it would offer other airlines help such as the 150 million euro bridging credit it provided to Air Berlin, Germany’s second largest airline, when it ran into trouble last year.
“Increased competitive pressure could result in further business restructurings, such as bankruptcies,” the government said in response to the query from the pro-business Free Democratic Party (FDP).
Nordic budget airline Primera Air, which began in 2003, this month became the latest European carrier to go bust, telling staff that all flights were being halted and leaving thousands of passengers stranded.
The collapse came exactly a year after Britain’s Monarch Airlines went under after falling victim to intense competition for flights and a weaker pound. Air Berlin filed for bankruptcy protection in August 2017.
18 October 2018
Cobalt Air grounds flights
News reports state that Cobalt airlines, the largest Cyprus-based airline, grounded all its flights as of midnight on Wednesday, after reports said that the company failed to reach a deal with a potential European investor.
All flights were cancelled after the last one which arrived at Larnaca airport from Heathrow at 12.20 on Thursday morning.
The Cobalt website instructed passengers who have unused tickets not to go to Larnaca airport or any departure airport on Thursday as no Cobalt flights would be operating and no Cobalt staff would be present.
The transport ministry said in a statement that passengers expecting to fly with Cobalt on Thursday should secure one-way tickets in economy class from another airline, and keep their receipt for their reimbursement.
Passengers expecting to travel with the airline for the seven days following Thursday will be informed promptly about travel procedures, the ministry said.
It was not immediately clear how many passengers would be affected, but nine flights had been scheduled to arrive and further nine to depart at Larnaca airport on Thursday. In all, the airline flew to 23 destinations.
In a statement on its website the airline said: “Cobalt regrets to announce that it will be cancelling all Flights as of 23:50pm on October 17, 2018 due to indefinite suspension of Cobalt’s operations. As a result, future flights or services provided by Cobalt will be cancelled and will no longer operate”
Cobalt informed the ministry and the Aviation Licensing Authority about their decision late on Wednesday night. The authority called for a meeting on Thursday with the shareholders to discuss the issue.
The company is expected to officially file a stop in operations statement to the ministry on Thursday as well.
In statements earlier on Wednesday night transport minister Vasiliki Anastasiadou said: “Without having any legal obligation, we will of course ensure that we help the passengers.”
According to Economy Today website, the company has only €15 million its accounts, which is expected to be used to pay the employees.
In early October rumours began circulating that the budget airline was facing cash-flow problems after two of its aircraft were grounded for two days, causing delays to certain flights.
Reportedly, the reason was that Cobalt had not paid the monthly leasing fee to the American company that owns the two planes.
The company posted losses for the year 2017, while in May this year the airline sacked its CEO Andrew Madar.
According to local media, earlier this week the Air Transport Licensing Authority (part of civil aviation) summoned Cobalt officials to a meeting.
Civil aviation had been monitoring the airline for some time but reports said that the airline had been consistent with all its payments (salaries, etc) as well as with its aircraft maintenance obligations.
Officially, Cobalt has declined comment. But sources within the company attributed the liquidity problems to a difficulty by Chinese investors to export capital due to Chinese government restrictions.
The airline’s main stockholders are AJ Cyprus, holding 49 per cent of the shares. AJ Cyprus is owned by Chinese Avic Joy Air.
The airline employs around 200 people.
Cobalt stepped in to replace bankrupt Cyprus Airways, which shut down in January 2015.
The low-fare airline began operating in 2016. Its fleet consists of two Airbus 319s (144 seats) and four Airbus 320s (156 seats).
In 2018 the airline flew to 23 destinations.
The Cyprus Tourist Agencies Association is expected to hold a meeting on Thursday to discuss the issue.
The association’s head, Vasilis Stamataris, described the closure of Cobalt as “a great loss.”
1 October 2018
Primera Airlines files for insolvency
News reports state that A budget airline that began offering long-haul flights from UK airports including Stansted to the US earlier this year has collapsed.
Primera Air said it was ceasing all operations at midnight on Monday after 14 years of operations.
Two flights to Washington and New York due to leave Stansted on Monday night have been grounded.
The Civil Aviation Authority confirmed that Primera had ceased operations.
Stansted told passengers booked on flights with the airline not to go to the airport.
Three Primera flights were in the air on Monday night, including one from Birmingham to Malaga, according to Flight Radar.
The Danish-registered airline is not part of the CAA's ATOL Protection scheme, which only covers passengers booked on package holidays.
The regulator has advised passengers who have travelled on a Primera flight they will need to make their own arrangements to return to the UK and to contact their travel insurer or travel agent.
Neither will those who booked directly with the airline on future flights be covered, the CAA advises.
Passengers who paid by credit card may be protected by Section 75 of the Consumer Credit Act 1974 and are advised to check with card issuers. Similar cover may apply if a Visa debit card was used.
The Icelandic-owned airline said it had failed to secure long-term financing, meaning it had "no choice" but to file for bankruptcy.
19 September 2018
Qatar Airways $69 Million loss
News reports state that Qatar Airways reported on Tuesday a 252 million riyals ($69 million, Dh251.7 million) loss for the financial year ending March 31, citing a regional political dispute that has seen it banned from four Arab countries.
Saudi Arabia, the UAE, Egypt, and Bahrain have banned Qatar Airways since June 2017 as part of a dispute they have with the government of Qatar.
“This turbulent year has inevitably had an impact on our financial results,” Qatar Airways Chief Executive Akbar Al Baker said in a statement. Adding "the most challenging year in its 20-year history".
The airline, which restated its year-earlier profit to 2.8 billion riyals, said it carried 29.2 million passengers in the year to March 31, down from 32 million a year earlier.
Qatar Airways lost access to 18 cities in the fall-out from the dispute, including to popular destinations in Saudi Arabia and the UAE.
It has also had to increase costs and operate longer flights on some routes to avoid the airspace of the four countries.
The airline said it had mitigated the impact of the dispute by launching flights to new destinations, increasing flights on existing routes, and leasing aircraft to other airlines.
“New destinations come with launch costs and the necessity to establish market presence, which resulted in an overall net loss,” the airline said.
Qatar Airways had warned in recent months that it would report a loss and since said it could make a loss again this year and potentially need to tap its owner, the government of Qatar, for a capital injection.
9 September 2018
Air Mandalay suspends operations
News reports state that Air Mandalay has temporarily suspended operations effective from September 4, the carrier said in a statement.
Air Mandalay, which began operations in Myanmar 24 years ago, said it may resume services in the future subject to restructuring and an improvement in market conditions.
The announcement comes after FMI Air ceased operations in July amid higher fuel prices and a slump in the tourism industry that has also forced other domestic carriers in the highly competitive domestic market to halt services.
“It is increasingly challenging to operate in Myanmar’s aviation sector,” Air Mandalay spokesperson Daw May Thandar Win said.
“Air Mandalay is presently working closely with the government to resolve a number of issues affecting the airline and the aviation industry. The first priority for the airline is to look after the welfare of its employees and their job security,” she said.
The statement said passengers booked to travel with Air Mandalay after September 4 would receive a full fare refund.
Air Mandalay said it had been extremely difficult to operate in Myanmar when the country was under military rule and the target of sanctions.
It said the situation had worsened after the transition to democracy began in 2011, when the approval of new airline licences resulted in “too many domestic carriers, oversupply of seats and intense competition, with airlines suffering heavy losses”.
30 August 2018
Skywork files for bankruptcy
News reports state that the last SkyWork flight landed in Bern Airport on Wednesday night, as ongoing financial difficulties forced the company to declare itself bankrupt. Some 11,000 passengers are affected.
The company, founded in 1983, cited the failure of negotiations with a potential partner to pull the company from recurring funding shortfalls that intensified in October last year.
As a result, “SkyWork Airlines has decided to hand in its operating license to FOCA [the Federal Office of Civil Aviation]”, the company wrote in a press releaseexternal link. It will also file for bankruptcy, and a court will decide on next steps.
The company employed over 100 people and its six turboprop Saab 2000 planes served 22 European destinations from its hub just outside the Swiss capital.
The grounding of its fleet leaves 11,000 pre-booked passengers facing the challenge of securing refunds or alternative travel arrangements.
FOCA has outlined the options available to stranded travellersexternal link and is manning a ‘Passenger Rights’ telephone hotline for those with further questions. Those with SkyWork bookings are advised not to come to the airport, and rather to contact the booking or travel agent where they initially bought tickets.
The wind-down of SkyWork also leaves Bern Airport in a difficult situation, as the airline represented 60% of the total flights serving the Swiss capital.
But authorities at the airport – where almost 300,000 passengers pass through each year – said that its existence was not threatened, and that the immediate priority would be to maintain flights to the most popular European destinations SkyWork had served.
The summer service of Helvetic Airways, which flies from Bern to holiday destinations in Italy, Spain, France, and Greece, remains unaffected, the airport confirmed.
23 August 2018
LATAM Airlines loss
News reports state that LATAM Airlines, the biggest airline group in Latin America, reported a net loss of $114 million in its second quarter, a period that is usually the weakest for air travel companies throughout the region.
But this year has brought additional challenges for airlines, including rising oil prices and a weak Brazilian real that makes international travel more costly for Brazilians, a top market for LATAM together with Chile. The company said the weaker real had netted a $79 million loss.
20 August 2018
Norwegian Air Loss
New reports state that rising costs associated with the launch of transatlantic flights from Ireland to the US led the Dublin-based arm of Scandinavian airline Norwegian Air to report a $445 million (€391m) loss in 2017. This is more than double the $205 million loss it recorded a year earlier.
However, Norwegian Air International, which attributed the increased losses primarily to new base set-up costs, said it expected the airline to fare better in the years ahead on the back of increased business.
Last year the group’s parent Norwegian Air Shuttle launched 54 new routes, a large number of which were between Ireland and the US as it introduced services from Dublin, Cork, Shannon and Belfast.
Europe’s third largest budget airline, the subject of a recent takeover proposal by Aer Lingus-owner IAG, reported ancillary revenue of $1.94 billion last year, as against $1.43 billion in 2016.
The parent, which injected $350 million into its Irish subsidiary over the period, posted a surprise net profit of 254 million Norwegian crowns ($31m) for the first six months of 2018 after losing 1.8 billion crowns in 2017.
16 August 2018
Korean Air profits plunge with losses
News reports state that Korean Air Lines Co., South Korea's flag carrier, said its net losses widened in the second quarter from a year earlier due to higher fuel costs.
Net losses deepened to 304.70 billion won (US$270 million) for the three months that ended in June from 200.33 billion won a year earlier, the company said in a regulatory filing yesterday.
Operating profit plunged by 61 percent to 66.7 billion won in the June quarter from 172.81 billion won a year ago. Sales grew by 6.9 percent to 3.106 trillion won from 2.905 trillion won during the cited period, it said, Yonhap reports.
14 August 2018
Thai Airways loss
News reports state that Thai Airways International Pcl reported a narrower second-quarter loss on Friday on higher revenue and property sales.
Thai Airways made a net loss of 3.1 billion baht ($93 million) in the April-June period compared with a loss of 5.2 billion baht a year earlier. The carrier missed Thomson Reuters I/B/E/S estimates of 1.3 billion in losses.
Earnings were helped by a 655 million baht gain from the sale of its hotel business and 632 million baht from property sales.
9 August 2018
Cathy Pacific loss
News reports state that Cathy Pacific reported an unexpected loss for the first six months of the year as fuel costs mounted, sending its shares to an eight-month low as investors brushed off the Hong Kong carrier’s projections for a seasonally better performance in the second half.
Shares in the carrier fell as much as 3.3 per cent on Wednesday to their lowest since December after it disclosed a net loss of HK$263m ($33.5m) in the six months through June. That was a narrowing from a loss of HK$2.1bn in the same period a year earlier but far shy of the HK$140m net profit forecast in a Bloomberg poll.
Cathay reported consecutive annual losses for the first time in its history in March. As it tries to weather growing competition from mainland Chinese and Gulf carriers, Cathay has implemented a turnround programme, including replacing its chief executive and cutting jobs at its Hong Kong headquarters.
“Our airlines usually perform better in the second half of the year than in the first half of the year. We expect this to be the case in 2018,” said John Slosar, Cathay chairman, on Wednesday.
The company said fuel costs for Cathay Pacific and its wholly owned subsidiary Cathay Dragon rose 31.6 per cent in the first half from a year earlier, as oil prices climbed to a four-year high during the period.
3 August 2018
Air France losses
News reports state that Air France-KLM has reported a first-half pre-tax loss of €89m after profit in the second quarter fell almost 80 per cent because of strikes, a higher oil price and currency effects.
For the quarter to the end of June, pre-tax profit fell to €167m, but revenue, at €6.6bn, came in within analysts’ expectations, and operating income, at €345m, beat them. Twelve days of strikes cost it €260m in the quarter, and €335m in the first half.
1 August 2018
WestJet stock dives on losses
News reports state that WestJet Airlines Ltd. reported its first quarterly profit loss in 13 years on Tuesday following a turbulent second quarter that saw the airline narrowly avoid a pilots’ strike, but absorbed soaring jet fuel prices.
“Our 2018 results are off track from the path to our 2020 targets and we are now operating in a very different fuel and competitive environment against earlier assumptions,” WestJet’s chief executive Ed Sims told analysts on a conference call on Tuesday.
“To maximize our returns for this challenging period, we are taking action to improve interim results while also re-evaluating the pace and implementation of our strategic initiatives.”
25 July 2018
JetBlue 2Q net loss
News reports state that JetBlue Airways Corp. (JBLU) on Tuesday reported a second-quarter loss of $120 million, after reporting a profit in the same period a year earlier.
On a per-share basis, the New York company said it had a loss of 38 cents. Earnings, adjusted for asset impairment costs, were 38 cents per share.
The results beat Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 36 cents per share.
The airline posted revenue of $1.93 billion in the period, which matched Street forecasts.
JetBlue shares have dropped 11 percent since the beginning of the year. The stock has decreased 16 percent in the last 12 months.
14 June 2018
Etihad $1.5 Billion loss
News reports state that UAE's flag carrier Etihad Airways has today announced their financial result for 2017. The airline has posted a 1.52 Billion US-Dollar net loss, a reduction by one fourth compared to the previous year. Revenue income increased by 2% to US$ 6.1bn, up from US$ 5.9bn in 2016. It is important however to note that these figures do not include any one-off payments.
Fuel costs increased by US$ 337mn while a strong focus on efficiency resulted in a 7.3% reduction in unit costs. General expenses decreased by 14%, making for a US$ 162 million reduction in administrative costs.
Etihad Airways transported 18.6 million passengers at a 78.5% load factor. Available Seat Kilometres (ASKs) increased by 1% in 2017, a clear sign of small capacity growth which also contributed to an improvement in revenues. Cargo capacity however was down by 6%, noteworthy is that revenue declined only marginally, down 0.8%, driven by stronger load factors and yields. Etihad Cargo carried 552,000 tonnes of cargo in 2017. The airline sent five A330-200F to storage at the beginning of 2018 and most of them have been out of service for several months before heading off to storage.
Chairman of Etihad's board, H.E. Mohamed Mubarak Fadhel Al Mazrouei said in a statement: “Our airline continues to be a key driver of Abu Dhabi’s vision to develop its tourism sector, grow commerce and strengthen links to key regional and international markets", adding: “This was a pivotal year in Etihad’s transformation journey. Everybody worked extremely hard to navigate the challenges we faced. We made significant progress in driving improved performance and we are on track in 2018.
1 June 2018
JetGo enters administration
News reports state that Brisbane-based regional carrier Jetgo Australia has grounded its passenger services after entering into voluntary administration on Friday.
The airline, with its fleet of five Embraer aircraft, flew regular passenger services to and from Brisbane and Melbourne’s Essendon Airport to regional centres in the eastern states.
“Jetgo Australia will continue limited charter operations, however, all Regular Passenger Transport
scheduled services are suspended for the duration of the administration period,” the company said in a statement.
Jetgo had operated as a charter service focusing on FIFO workers in the resources sector from 2012, but expanded into regular passenger services after it received regulatory approval to run as an airline in October 2014.
30 May 2018
Saratov Airlines ceases operations
News reports state that after a period of uncertainty over the fate of Saratov Airlines, the Russian aviation authorities have taken the final decision to cancel the airline’s Air Operator Certificate (AOC) thereby killing any hope that the regional carrier may resume operations.
“Based on the findings of random inspections conducted by Rosaviatsiya in the aftermath of Saratov Airlines’ An-148 crash on February 11, 2018, after a period designated for eliminating its [safety] flaws [Rosaviatsiya] cancels the airline’s AOC. The airline demonstrated a perfunctory approach to correcting the non compliances and absence of due control on the part of its management,” reads an official notice of Russia’s Transport ministry.
The AOC is cancelled starting May 31, Rosaviatsiya commented, saying the decision is a “compelled measure”, dictated by the airline’s failure to correct its flaws in due time. “A random inspection of flight assignments, crew working time sheets and other documents for April and May […] revealed that the violations continue and tend to be systematic,” the regulator says in a statement.
16 May 2018
NextJet files for bankruptcy
News reports state that regional airline Nextjet announced on Wednesday it was filing for bankruptcy.
It cancelled all its flights from 1pm onwards with immediate effect.
"It is deeply regrettable that the board is forced to make this decision. Especially for our passengers who are directly affected by this and for our staff, but also for our suppliers and partners," said Nextjet CEO Magnus Ivarsson in a statement.
"We have done everything in our power to find a solution, but have unfortunately not succeeded. A liquidator will now be appointed to make a decision on the future of the company," he added.
According to Nextjet, whose website crashed after the announcement, it is no longer possible to book tickets. It urged passengers not to go to the airport, but contact a travel agency or their credit card provider for more information. If you paid for your ticket with a credit card you may be able to claim money back.
Sweden's Transport Agency (Transportstyrelsen) revoked Nextjet's operating licence in August last year due to the company's financial difficulties. However, it was still able to operate under a temporary permit and in October the Transport Administration approved a new licence for the company.
Nextjet is based at Stockholm Arlanda airport. The majority of its destinations are in northern Sweden.
4 May 2018
Nature Air grounded
News reports state that Again, the General Directorate of Civil Aviation (DGAC) of Costa Rica indefinitely suspended the operating permit to the airline “Nature Air”. In this case, the reason is that of the abandonment of its routes.
The company has not made flights since December 31st, 2017, when a plane crashed in Nandayure, Guanacaste, causing the death of 12 people. At that time, due to the lack of equipment to operate, the permit was suspended and on February 1st he received the endorsement, however, he has not made a single trip so far.
1 May 2018
Air Canada loss
News reports state that April 30 (Reuters) - Air Canada, the country’s largest carrier, reported a bigger quarterly loss on Monday as higher fuel costs offset a rise in traffic.
Fuel costs per litre jumped 16 percent in the first quarter, the Montreal-based airline operator said, while traffic rose 11.4 percent.
The company said its operating expenses went up 11 percent and cost per available seat mile (CASM)- a measure of how much an airline spends to fly a passenger - rose 2.4 percent.
The airline’s net loss widened to C$170 million ($132 million), or 62 Canadian cents per share, in the quarter, from C$13 million, or 5 Canadian cents per share, a year earlier.
On an adjusted basis, the company lost C$52 million.
Operating revenue rose to C$4.07 billion from C$3.64 billion.
1 May 2018
Jazeera Airways Loss
News reports state that Kuwait-based Jazeera Airways on Wednesday announced double digit growth in both revenue and flown passengers in the first quarter of 2018.
The airline recorded an operating revenue of KD14.3 million, up 42.7 percent from Q1 2017, and a net loss of KD0.3 million, an improvement of KD0.636 million from Q1 2017.
Passenger numbers in the first three months of 2018 totalled 403,863, up 43.1 percent from the year-earlier period.
Load factor on flights reached 75.8 percent, up 5.4 percent from Q1 2017, the airline added in a statement.
Jazeera Airways chairman Marwan Boodai said: “Despite the first quarter being a low travel season historically, we saw a 43.1 percent increase in flown passengers this year, a 42.7 percent growth in topline earnings, and significant improvement in our bottom line earnings.
27 April 2018
Lufthansa Loss
News reports state that German airline Lufthansa Group (DLAKF, DLAKY) reported that its first-quarter net loss narrowed to 57 million euros from 68 million euros in the year-ago period. Loss per share for the quarter was 0.12 euro, compared to loss of 0.15 euro a year ago.
Operating profit or EBIT for the quarter grew 68.8 percent to 27 million euros from 16 million euros a year ago. Adjusted EBIT, a leading financial performance indicator of business success, was 26 million euros, compared to 25 million euros last year.
The company noted that adjusted EBIT margin improvements at the Group's Network Airlines and Lufthansa Cargo were largely offset by significant one-off costs at Eurowings from its growth in the context of the Air Berlin insolvency.
Total revenues for the quarter declined 0.7 percent to 7.64 billion euros from 7.69 billion euros in the year-ago period. The slight decline in revenue was due to the first-time implementation of the new IFRS 15 accounting standard. Without this, first-quarter revenues would have increased by 4.5 per cent.
Looking ahead to fiscal 2018, Lufthansa affirmed its outlook for adjusted EBIT to be slightly below previous year's record level. The company also affirmed its outlook for a reduction in unit costs excluding fuel and currency factors by 1 to 2 per cent and a stable development of unit revenues excluding currency factors.
However, Lufthansa now expects an organic capacity growth of some 6 per cent for 2018, compared to its earlier outlook in March for organic capacity to increase by some seven percent.
Due to this one-percentage-point reduction in capacity growth and a weakening of the U.S. dollar, the guidance for fuel costs has been lowered by 100 million euros. Annual fuel costs are now expected to increase by 600 million euros in 2018 to 5.8 billion euros.
25 April 2018
Qatar Airways large loss
News reports state that DOHA, 25 April 2018: Qatar Airways will continue to expand even as it prepares to announce “large” annual losses due to a blockade by neighbours, the airline’s chief executive said on Monday.
Airline CEO, Akbar al-Baker, said the Gulf carrier remained a “very robust company” despite being heavily affected by a regional diplomatic dispute that has seen it lose access to routes across Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.
“Yes, it will be a large loss. When I say we will be declaring a large loss, for me, after making profit, then even if I lost only 10 million, it’s a large loss,” Baker told a press conference.
But he said that the national carrier is not in danger of a collapse.
“You can see although that we are predicting a loss, we are still expanding, we are still investing, we are still buying airplanes.
“We will keep on expanding, keep on recruiting not firing people, not parking airplanes, (and) shrinking the network, doing exactly the opposite.”
Barring Qatar Airways from using its neighbours’ airspace has increased costs for the company during the 10 months since the crisis erupted.
21 March 2018
Kenya Airways $60.34 million loss
News reports state that Kenya Airways said on Wednesday its nine-month after tax loss stood at 6.1 billion shillings ($60.34 million), while its pretax loss was 5.97 billion shillings, adding its performance was hurt by a prolonged election period and rising fuel prices.
Hellen Mwariri, acting chief financial officer, said nine-month operating profit to end of December stood at 1.3 billion shillings.
Its pretax loss for the full year to end March 2017 was 10.2 billion shillings, while after tax loss was 9.96 billion shillings, and operating profit was 897 million shillings.
16 March 2018
Virgin Atlantic first loss in four years
News reports state that Virgin Atlantic has made its first loss in four years after the UK airline founded by Sir Richard Branson was hit by problems with the Rolls-Royce engines that power its Boeing 787 Dreamliners and a weak pound that hurt UK demand.
The group on Thursday reported a £28.4m loss before tax and exceptional items for 2017, compared with a £23m profit a year ago.
The UK carrier, which is 49 per cent owned by US carrier Delta Air Lines, has had a tough year after all of its Boeing 787 Dreamliners, which make up a third of its fleet, were affected by faults with the Rolls-Royce Trent 1000 engine.
The problems have caused disruption and costs for Virgin Atlantic that has been forced to ground up to four of its aircraft at a time for repairs, as well as leasing additional planes.
Craig Kreeger, chief executive of Virgin Atlantic, said the airline had to deal with a trio of big external issues last year.
A weak sterling relative to the dollar, which impacted demand from UK travellers flying to the US, problems with the Trent 1000 engines as well as Hurricane disruption in the Caribbean and the US.
The group declined to say whether it expected to make another loss in 2018, saying only that the environment remained “challenging”.
Virgin Atlantic confirmed on Thursday it had leased three additional Airbus A330-200 to make sure it continued to provide a reliable service amid a shortage in the supply of the Trent 1000 engines.
Tom Mackay, chief financial officer at Virgin Atlantic, said it was in private discussions with Rolls-Royce regarding compensation and would not comment on how much the engine problems had cost the airline to date.
Last week, Rolls-Royce revealed that repairing problems with turbine and compressor blades on the Trent 1000 engine, and the Trent 900 engine that powers the A380 superjumbo, incurred a cash cost of £170m for the UK engineering group in 2017. This was expected to increase to about £340m this year. The problems were expected to be fully resolved by 2021-22, it said.
5 March 2018
Mega Maldives Airlines suspends operations
News reports state that MEGA Maldives Airlines is to temporarily suspend commercial flight operations from the 2nd of May 2017 onwards as part of its restructuring and recapitalization efforts.
Within this period, MEGA Maldives Airlines will not have any flights in operation, while the Company’s other management and administrative functions will continue as before.
Since 2016, MEGA Maldives Airlines has been involved in the complex process of restructuring the company with the aim of recapitalizing and upgrading to meet the level of product our customers and the Maldives require and deserve. This process would involve securing new investments, bringing changes to the ownership structure of the company, and a review of MEGA’s fleet strategy with a view to acquire newer, and more suitable aircraft for the many markets we serve. It would also involve the complete retraining of MEGA’s flight crew and a renovation of its facilities.
MEGA Maldives Airlines throughout this period has been closely coordinating with relevant government and regulatory authorities in the Maldives, as well as its stakeholders in the tourism and aviation sectors.
2 March 2018
Thai Airways back in the red
News reports state that at a critical point in its restructuring plan and just a year after posting a marginal profit for the first time in four years, Thai Airways International fell back in the red again.
Thailand's state-owned flagship carrier registered a net loss of 2.1 billion baht ($67 million) in 2017, blaming heavy competition that pushed down airfares as well as a rise in fuel expenses, according to stock exchange filings that were announced late Monday.
The number of passengers increased by 10% year on year as Thailand enjoyed a record year of international arrivals. The average load factor improved to 79.2% from 73.4% a year ago. The volume, however, could not offset the decline in ticket prices and passenger yield went down 7%.
Meanwhile, the average jet fuel price was $70.48 per barrel in 2017, up from $56.73 in 2016. Adding to recovering oil prices, the Thai government hiked the excise tax on jet fuel for domestic flights to 4 baht a liter from 0.2 baht at the beginning of the year. That move also ate into 2017 profits of other carriers in the country. Net profits at Bangkok Airways, a mid-size regional airline, and Asia Aviation, the operator of Thai AirAsia, were down 55% and 21% on the year, respectively.
15 February 2018
Norwegian reports record loss
News Reports state that Low-cost carrier Norwegian has reported a net loss of £27.4 million in 2017, blaming “extraordinary costs”.
The airline says significant costs related to increased fuel prices, wet lease and passenger care affected its results. The loss is a stark contrast to the company’s £100 million profit in 2016.
Norwegian’s total revenue was almost £2.8 billion, up 19 per cent on 2016. A total of 32 new aircraft contributed to a 25 per cent increase in available seat kilometres (ASK). Load factor remained flat at 88 per cent, while the carrier saw 33 million passengers for the year – up 13 per cent on 2016.
The news of the loss comes just days after the airline announced it would focus its long-haul growth on destinations from the UK market, including the replacement of its Gatwick Dreamliner fleet with aircraft featuring a new, expanded Premium cabin.
CEO Bjorn Kjos commented: “We are not at all satisfied with the 2017 results. However, the year was also characterised by global expansion driven by new routes, high load factors and continued fleet renewal. Through our global strategy, we contribute to local economic boost and increased employment at our destinations, as well as ensuring that more people can afford to fly – not least between the continents.”
3 January 2018
Fly Viking to cease operations
News reports state that Fly Viking will cease operations from the 12th January.
In a statement on the carrier’s website, chairman Ola Olsen said it was “not economically viable to move on with the material we have today. Further, a controlled winding up will allow us to suspend operations in FlyViking within a reasonable time, while neither customers, suppliers, employees or hired personnel will be injured.”
18 December 2017
Ryanair shares plunge
New reports state that Ryanair shares fell 8.9pc after the company said it would talk to pilot unions for the first time in a move aimed at averting a pre-Christmas strike.
However, the strike planned by Ryanair pilots days before Christmas may still go ahead, despite the airline's dramatic decision to recognise unions for the first time and personal reassurance from chief executive Michael O'Leary that the offer of recognition is genuine.
Speaking yesterday, CEO Michael O'Leary said the radical U-turn was a bid to avoid travel chaos for customers during Christmas week.
Mr O’Leary spoke to the airline’s chief captains across its almost 90 bases.
During a conference call with the pilots, Mr O’Leary is understood to have said that the offer of union recognition from Ryanair today is genuine.
He also told pilots that the move will have a longer-term positive impact on the carrier.
Ryanair has sought a meeting with the Irish Airline Pilots' Association (IALPA) on Wednesday, the day planned strike action is set to take place, and has asked the union to call off the strike.
However IMPACT trade union, to which IALPA is affiliated, has indicated that the strike will go ahead as planned if a meeting is not held with representatives of the airline before then.
One day of industrial action is planned for Wednesday December 20 and will mostly involved captains.
In a statement yesterday evening Ryanair said:
"The IMPACT union promised to call off the strike if Ryanair conceded recognition. They’ve gotten our offer of recognition in writing and we’re happy to meet them next week, which itself is the first act in recognising IALPA.
"The UK and Italian unions have already agreed to meetings with Ryanair and have called off the threatened strike in Italy.
"The sensible course of action is for IALPA to meet with Ryanair next Wednesday, but call off the unnecessary threats of disruption to the Christmas flights of thousands of customers."
13 December 2017
Niki files for bankruptcy
News reports state that Austrian airline Niki will stop flying for the time being after filing for insolvency, parent Air Berlin (AB1.DE) said on Wednesday.
After Lufthansa’s (LHAG.DE) planned acquisition of Niki fell through and no other buyer could be found at short notice, Niki filed a petition to open insolvency proceedings with the a court in Berlin-Charlottenburg, it added.
Lufthansa had said on Wednesday it had offered to give up take-off and landing slots in order to get the deal approved, but that the European Commission considered that to be insufficient.
29 November 2017
Darwin Airlines files for Insolvency
News reports state that The Swiss Federal Office of Civil Aviation (FOCA) has revoked Darwin Airline’s operating certificate due to “financial reasons,” forcing the Lugano-based carrier to cease all operations on Tuesday. The airline posted a message on its website indicating it is working on a solution to restart operations soon.
The move by FOCA comes a day after Darwin filed for insolvency due to what it called “several unfavorable market impacts” that beset new owner Adria Airways since it bought the Swiss regional airline in June. Darwin said it would work to save as many jobs as it could by continuing to fly under its existing operating certificate, becoming a crew service provider for pilots and flight attendants and offering maintenance services for both its own aircraft and third parties.
Although it bought Darwin a month after code-share partner Alitalia declared insolvency, Adria named the resulting termination of all business contracts with the Italian flag carrier as one of the difficulties it faced. Later, the unexpected insolvency of Air Berlin, for which Darwin provided ACMI services, led to what the Swiss airline characterized as significant negative effects such as bad debt, loss of existing business and future business opportunities.
Darwin’s insolvency marks another casualty of Etihad Airways’ withdrawal from loss-making equity stakes in European airlines. Etihad sold its 33.3-percent share in Darwin in July, some two and a half months after it refused to inject further capital into Alitalia without steep concessions from employees
8 November 2017
Wizz Air shares grounded
News reports state that Wizz Air shares dropped as much as 8.5 per cent in morning trading — the stock’s worst day since June — after touching a record high on Tuesday.The Hungarian group raised full year net profit guidance on Wednesday to a range of €265m to €280m, after it defied wider airline industry woes by lifting revenues and profits 25 per cent in its first half. But analysts had already expected profits to come in at €278m for the fiscal year, above previous guidance of a €250m to €270m range.“There may be modest disappointment that the increase in guidance was not greater,” said Alex Paterson, an analyst at ING, although he added that the results were “nevertheless robust”.
18 October 2017
Flybe shares plunge 19%
News reports state that stricken airline sector to hit trouble after issuing a profit warning to investors on Wednesday.
In a statement to the markets, Flybe - Britain's third largest airline behind easyJet and British Airways - said that its profits for the first half of the 2017/18 financial year are now expected to be between £5 million and £10 million, a downward revision from a forecast of £15.9 million.
Investors in Flybe have not taken reacted well to the company's announcement, and in early trading share dropped by as much as 19%. By 8.20 a.m. BST (3.20 a.m. ET) a small rebound is underway, although shares remain close to 16% lower, trading at 37.5 pence each.
17 October 2017
Island Air files for bankruptcy
News reports state that Island Air will file for Chapter 11 bankruptcy protection, but officials said ticketing and flights will continue as normal.
The filing is needed, the airline said in a news release, "in an effort to continue normal operations while navigating through legal challenges recently presented by the lessors of its aircraft."
The airline added, "The bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers."
During the bankruptcy reorganization, Island Air said it plans to fly its scheduled routes as normal and honor all previously purchased tickets.
Frequent flyer and other customer service programs will also not change.
The airline said that last week, "while in the process of negotiating its aircraft leases with its lessors, Island Air was very surprised that the lessors served them with notices of termination of the leases and demands to surrender its airplanes."
"Prioritizing its customers, employees and the communities it serves, Island Air made the difficult decision to file for bankruptcy protection. Continuing to operate under the protection of the United States Bankruptcy Court will allow Island Air to maintain its service to its customers, provide continued employment to its more than 400 valued employees, and ensure a revenue stream so its vendors are paid."
13 October 2017
Flight sales plummet due to Hurricane season
News reports state that Caribbean countries and southern U.S. states were battered by several record-breaking hurricanes this summer that caused billions in damages and affected travel. Major airline companies like JetBlue Airways and Delta Air Lines reported revenue loss due in part to storm-induced airport closures.
JetBlue said that hurricanes will cost the company more than $100 million in lost revenue and slashed profits for its third and fourth quarters.
The airline company said Wednesday that hurricanes cut income by $44 million in the third quarter and between $70 million and $90 million for the fourth quarter, the Washington Post reported.
Behemoth storms such as Hurricanes Irma and Maria reduced third-quarter operating income by $30 million to $35 million, equivalent to 6 or 7 cents per share, and will lower fourth-quarter income by $50 million to $70 million, or 10 to 13 cents a share.
JetBlue’s projections were part of September’s passenger traffic report, which is based on booking trends.
"Our thoughts are with all of those impacted by hurricanes in recent months," CEO Robin Hayes said in a statement, according to USA Today. "The third quarter presented unprecedented weather challenges for JetBlue, with two of the largest hurricanes in our history impacting our network."
"We remain committed to the rebuilding efforts, particularly in Puerto Rico," Hayes said. "We are confident that the adjustments we are making to our network will minimize any ongoing financial impact in 2018."
2 October 2017
Monarch Airlines ceases trading
News reports state that Monarch Airlines has ceased trading and all of its future bookings have been cancelled, the Civil Aviation Authority has said.
About 110,000 customers are currently overseas and the government has asked the CAA to charter more than 30 aircraft to bring them back to the UK.
Monarch is the UK's fifth biggest airline and the country's largest ever to go into administration.
Customers due to fly from the UK have been told not to go to the airport.
Monarch had been in last-ditch talks with the CAA about renewing its licence to sell package holidays.
It had until midnight on Sunday to reach a deal with the aviation authority but failed to do so.
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Advice to Monarch customers, issued by CAA
Customers in the UK yet to travel: don't go to the airport
Customers abroad: everyone due to fly in the next fortnight will be brought back to the UK at no cost to them. There is no need to cut short your stay
Customers currently overseas should check monarch.caa.co.uk for confirmation of their new flight details - which will be available a minimum of 48 hours in advance of their original departure time
All affected customers should keep checking monarch.caa.co.uk for more information
The CAA also has a 24-hour helpline: 0300 303 2800 from the UK and Ireland and +44 1753 330330 from overseas
Grey line
The airline carried 6.3 million passengers last year to 40 destinations from Gatwick, Luton, Birmingham, Leeds-Bradford and Manchester airports.
Monarch, founded in 1968, employs about 2,500 people and is made up of a scheduled airline, tour operator and an engineering division.
Transport Secretary Chris Grayling said: "This is a hugely distressing situation for British holidaymakers abroad - and my first priority is to help them get back to the UK.
"That is why I have immediately ordered the country's biggest ever peacetime repatriation to fly about 110,000 passengers who could otherwise have been left stranded abroad."
Monarch Airlines failure: Live updates
The government has warned passengers to expect disruption and delay as it works to ensure there are enough flights to return the "huge number" of passengers.
The CAA says planes are already on their way to some European airports to bring home people due to fly back on Monday. The "vast majority" of them will return by the end of the day.
Andrew Haines, chief executive of the CAA, said the "scale" of the operation means "some disruption is inevitable".
He added: "We ask customers to bear with us as we work around the clock to bring everyone home."
How will package holiday customers be affected?
For people who booked package holidays - but have not yet flown - they will be able to apply for a refund through the Atol scheme, which refunds customers if a travel firm collapses.
"Experience suggests this will take weeks or months rather than days," says Simon Calder, travel editor at the Independent.
By law, every UK travel company which sells air holidays has to hold an Atol licence. Monarch's website says it only held the licence for package holidays, not flight-only tickets.
Monarch's owner, Greybull Capital, had been trying to sell part or all of its short-haul operation so it could focus on more profitable long-haul routes.
The airline reported a loss of £291m for the year to October 2016, compared with a profit of £27m for the previous 12 months, after revenues slumped.
29 September 2017
VIM Airlines grounded
News reports state that After carrying more than 11,000 tonnes of cargo this year, Russia’s VIM Airlines looks set to close, despite asking for government support to allow it to continue to operate in the face of huge debts.
While there is no confirmation of its total debts, Russian media are reporting a figure of between €49m and €145m, owed to airports, fuel providers and banks.
Rosaviatsiya says VIM owes six banks some Rb7bn (€100m). It is said to owe Rb500m (€7.2m) to Domodedovo Airport and is reported to be unable to buy fuel.
The carrier has suspended all flights, with seven other airlines tasked to bring passengers back.
Reuters reports that Aeroflot has agreed step in to help VIM, with one source saying it would offer €27m.
This week the Federal Air Transport Agency reportedly began a criminal investigation into the company, examining whether it was fraudulent to sell tickets on flights it could not afford to operate.
The carrier’s general director and chief accountant have been detained, while co-owner and president Rashid Mursekayev has reportedly fled to Istanbul.
21 September 2017
GLO Ailrines stops flying
News reports state that New Orleans startup airline GLO Airlines will fly no longer. A federal bankruptcy judge has ordered the company to start the process of selling off everything it owns in order to pay its bills.
FlyGLO LLC, the airline's parent company, filed for bankruptcy protection in April, but executives assured flights would continue as it restructured and worked through a dispute with the firm that manages and operates its flights.
29 August 2017
FlyDubai losss widen
News reports state that Flydubai, the Dubai-based budget carrier, on Monday reported deeper losses for the first half of 2017, as yields remain under pressure and fuel costs mount.
The Dubai Government-owned airline recorded a loss of Dh142.5 million for the first six months to the end of June, compared with a loss of Dh89.9m for the same period in 2016. Flydubai’s first-half revenues however climbed to Dh2.5 billion, a 9.9 per cent year-on-year increase.
Yields - an indicator of profitability measured by revenue earned from a flying passenger per kilometre - are under pressure and profitability margins tightening for airlines across the Middle East and North Africa (Mena) as economic growth has slowed. Etihad reported a $1.87bn loss for 2016, while Emirates, the largest airline in the world by passenger traffic, reported an 82.5 per cent decline in annual earnings.
16 August 2017
Monarch £291.1 Million loss
News reports state that Monarch Airlines, part of Greybull Capital-owned Monarch Group, lost £291.1million in the year to the end of last October, down from a profit of £26.9million in 2015.
Despite strong demands for its flights to Madrid and Lisbon, Monarch said it was hit by 'a number of trading headwinds'.
15 August 2017
Air Berlin Germanys second largest carrier filing for Bankruptcy
News reports that struggling German carrier Air Berlin says it's filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.
The Economy Ministry and Transport Ministry said Tuesday in a statement that the airline would get a loan of 150 million euros ($177 million) so that it can continue flights for the time being.
The ministries say "we're in a time when many tens of thousands of travellers and vacationers are in multiple international holiday spots. The return flights of these travellers back to Germany with Air Berlin would not have been otherwise possible."
The airline, which didn't answer calls, said in a statement that after Etihad pulled funding, it "came to the conclusion that there was no further positive way ahead for Air Berlin."
14 August 2017
Virgin records a $185 million loss
News reports state that Virgin Australia records $185 million loss. Virgin Australia's chief executive John Borghetti says an enduring capacity ceasefire with Qantas has set it up make the most of improving demand from business travellers and help it shift course towards profitability.
Australia's No.2 carrier handed down a smaller than expected full-year loss on Thursday and revealed it had become free cash-flow positive for the first time in five years.
Mr Borghetti said the first year of Virgin's three-year turnaround plan had seen a "seismic shift" to its finances, with improvements to cash flow, leverage and debt levels. The airline revised up the savings it expected a cost-cutting program to deliver from $300 million a year to $350 million a year by 2019.
"The first few years of the transformation was about investing and building," Mr Borghetti said.
"The second part is getting your financial metrics right.
"The third element then becomes sustainable profits going forward... [and] at a macro level that journey is pretty obvious and we're tracking on it."
On an underlying basis, which strips out impairment losses and other costs, Virgin booked a loss of $3.7 million, down from a $41 million profit last year but ahead of the $18 million loss analysts had forecast.
Mr Borghetti said that while the result had been hit by weak domestic demand, earnings had improved in the fourth quarter, coming in $38.4 million ahead of that quarter in 2016 thanks to increasing demand from corporate travellers.
While declining to give profit guidance for 2018, Mr Borghetti said he expected that positive momentum to continue and pointed to analysts' consensus forecast for a $80 million underlying profit.
Mr Borghetti said both Virgin and Qantas were deploying capacity rationally which meant they could increase airfares.
10 August 2017
Pen Air files for bankruptcy
News reports state that PenAir (Peninsula Airways, INC.) operating out of Kearney, North Platte, and Scottsbluff has filed for bankruptcy.
According to bankruptcy court documents, the Alaska-based airline filed for Chapter 11 bankruptcy Sunday night.
According to court documents, "PenAir's hubs in Portland and Denver have not lived up to expectations. For this reason, PenAir has decided to wind down its operations at those two hubs."
And according to those documents, Kearney, North Platte, and Scottsbluff flights will be discontinued to Denver.
"The federal Department of Transportation is responsible for managing the Essential Air Service contract with PenAir to provide air service in our community. With the departure of PenAir, the City of Kearney will pursue immediately, with the DOT, a re-bid process to secure a new air carrier," according to a statement released by the City of Kearney.
PenAir has been operating in Kearney since November of last year.
Approximately 700 people are currently employed by PenAir, according to court documents.
Now city leaders are dealing with the uncertainty it has left them.
"This impacts the service of the Nebraska and Kansas communities that PenAir presently serves."
On Monday morning the city was notified that PenAir plans to discontinue service in the next 90 days.
"Well I really haven't had discussions with PenAir. This kind of caught us off guard a little bit and of course those are some of the discussions we'll be having in the next few days. But at this point they just made their announcement and we're trying to regroup internally here at city hall to determine what our options are," City of Kearney Mayor Stan Clouse said.
The federal Department of Transportation is responsible for managing the Essential Air Service with PenAir.
The city will pursue immediately with the DOT for a rebid process to secure a new air carrier.
"It gives them the opportunity to reorganize, to figure out what their debt looks like and how do they manage their debt going forward and stay in business. Based on their preliminary plans they don't believe that they can continue to operate the Portland, Oregon and Denver hubs," said Clouse.
A passenger I spoke with says she is shocked.
"I'm flying out Wednesday and they never mentioned it nor said a thing when, at any time we flew with them today. I'm also flying to Alaska in a couple of weeks on them and no one said a word about it either.," PenAir passenger Kaye Kamp said.
"It enables your rural areas to connect with the larger hub and that's what were faced with now with the DOT managing the Essential Air Service program, so they can get a reliable carrier so they can connect with the larger hub," said Clouse.
The mayor of Kearney plans to talk to the DOT and PenAir for more details.
“Today’s news regarding PenAir is concerning for Nebraskans, especially those in our state’s rural areas and the Panhandle," Deb Fischer released in a statement Monday. "Reliable air service connects our families, businesses, and communities to the rest of our country and the world. As Congress considers the FAA reauthorization this year, I will continue to shore up support for the Essential Air Service program. I will also work to reduce burdensome regulations that harm Nebraska’s small and community airports by reducing the number of available pilots and increasing service costs.”
1 August 2017
Royal Jordanian loss
News reports state that Carrier Royal Jordanian posted net losses of 26.3 million JOD (USD 37 million) in the first half of the year. Jordan-based news agency Petra reported that the result was driven by seasonal fluctuations and a drop in average ticket price.
In June alone, however, the airline had a net income of 1.5 million JOD (USD 2.1 million), whereas in June 2016 it had incurred net losses to the tune of 2.1 million JOD (USD 2.9 million). This came despite a 27% increase in fuel expenditure year-on-year in June.
Stefan Pichler, the company’s president, has said that the losses in the first six months was the result of a significant drop in the prices of tickets due to the “tough” competition in the Gulf region.
He said that revenues declined 1%, although the number of passengers increased 6%, with the average occupancy rate going from 62% in 2016’s first six months to 68% in the same period in 2017. Besides, operational costs were up 3% due to an increase of 15% with fuels costs in the first six months.
However, the executive celebrated June’s result and said to be confident in the company’s recovery.
28 July 2017
Etihad $1.9 billion loss
News reports state that Etihad Airways swung to a $1.9bn loss in 2016, as the company struggled with “one off impairment” charges related to writedowns in aircraft and financial assets, and to fuel hedging losses.
The gulf carrier swung from a $103m profit to a $1.9bn loss in 2016, as revenues fell from $9bn to $8.4bn. Etihad said the majority of its loss was a result of exceptional costs related to a write-down in value and early phase-out of some aircraft types, as well as a $808m charge related to exposures to its “equity partners”, including Alitalia, which recently collapsed into administration.
However, the airline also reported trouble in parts of its underlying business. Yields fell 8 per cent amid “market capacity pressures and the tough global economic climate”, while a slowdown in the cargo market put “increased pressure” on revenues and yield.
24 July 2017
Volaris net loss
News reports state that Controladora Vuela Compania de Aviacion SAB. de CV (VLRS) on Friday reported a second-quarter loss of $29 million, after reporting a profit in the same period a year earlier.
The Santa Fe, Mexico-based company said it had a loss of 29 cents per share.
The results did not meet Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for a loss of 8 cents per share.
The operator of low-cost airline Volaris posted revenue of $334 million in the period.
Controladora Vuela shares have climbed 2 percent since the beginning of the year. The stock has fallen 17 percent in the last 12 months.
14 July 2017
Norwegian Air shares in a tumble
News reports state that Norwegian Air has reported a slump in earnings and said the outlook for both growth and costs was worse than had previously been expected.
Shares in Europe's third-largest budget airline, behind Ryanair and EasyJet, dropped as much as 11pc to their lowest since October 2014, taking this year's losses to 34pc.
The company has recently launched low-cost transatlantic flights from Dublin, Cork, Belfast and Shannon.
This strategy of taking on more established flag carriers comes with a number of risks, such as buying or leasing larger, more expensive planes, and its plan has been hit by rising costs in recent months.
The airline said its second-quarter adjusted operating profit before leasing and depreciation dropped 21pc to 1.19 billion crowns (€126m), well below the average forecast in a Reuters poll of 1.51 billion crowns (€160m).
8 June 2017
Flybe £20 million loss
News reports state that struggling regional airline Flybe confirmed it swung to a loss in the last financial year, as overambitious past commitments to increase capacity drove up its costs even as customer demand slowed.
Revenues for the year to March 31 increased by 13.4 per cent, to £707.4m, but it reported a pre-tax loss of £19.9m, compared to a £2.7m profit the previous year.
Losses were exacerbated by a £4.8m writedown related to upgrading its IT systems; the writedown was at the lower end of its previous guidance, but it warned that it expects to take a further £6m of charges from cancelling existing contracts in the next financial year
7 June 2017
FastJet $25 Million loss
News reports state that Africa's budget airline Fastjet has warned that losses will continue well into 2016 after a "prolonged downturn" in its home market.
The carrier clocked up a £25m loss in the year to December 31 and was rocked by a shareholder rebellion.
"It is what it is," said Colin Child, Fastjet's chairman. "It's been a challenging environment and [that] has made life very difficult for us. Revenues haven't gone up by as much as they should have done."
The low-cost airline reported lower-than-expected revenues of $65m (£45m), a 17pc lift from the previous year. It blamed lower spending and political turmoil across Africa as well as currency devaluations in its main market of Tanzania.
The London-listed carrier, which also runs cheap flights in South Africa and Kenya, suffered boardroom turbulence this year after investors successfully demanded chief executive Ed Winter’s resignation.
Sir Stelios Haji-Ioannou, founder of Fastjet and one of the airline's biggest shareholders, won his campaign to oust Mr Winter in March amid claims he had "burnt some £80m" over the past three years.
5 June 2017
SpiceJet profits fall by 61%
News reports state that SpiceJet, India’s second-biggest low-cost airline, reported a 61.4% y-o-y fall in net profit to Rs 41.63 crore for the quarter ending March 31 owing to substantial rise in fuel cost and other operating expenses. In the corresponding period, the airline reported a net profit of Rs 107.87 crore.
Net sales during the quarter increased by 11.4% y-o-y to RS 1,613.83 crore as compared to Rs 1,448.66 crore in the year-ago period. Fuel cost, which is almost 40% of the total operating cost of an airline, increased by a whopping 67.9% y-o-y to Rs 551.83 crore. As a result the operating profit or the EBITDAR also declined by 21.9% y-o-y to Rs 315.94 crore as compared to Rs 403.52 crore in the year-ago period.
The finance cost during the quarter decreased to Rs 16.68 crore from Rs 46.34 crore, which indicates reduction in overall debt of the airline.
30 May 2017
Aegean Airlines posts loss
News reports state that Greece's largest carrier Aegean Airlines posted on Tuesday a net loss of 35.8 million euros ($40.21 million) for the first quarter, up from 21.5 million euros in the same period a year ago.
The company, a member of the Star Alliance airline group, said results were hurt by the underutilization of its fleet in winter months.
Revenues rose 3 percent to 151.9 million euros with passenger traffic increasing by 5 percent. ($1 = 0.8903 euros)
28 May 2017
El Al loss
New reports state that El Al Israel Airlines Ltd. (TASE: ELAL) today reported its results for the first quarter of 2017. Revenue from activity rose from $396 million in the first quarter of 2016 to $418 million in the first quarter of this year, a 5.3% increase.
Passenger segments grew 7.1% in the first quarter, compared with the corresponding quarter last year. El Al's supply of airplane seats was up 1.3%. The company's activity in terms of revenue passenger kilometers (RPK) increased by 5.1%. The airline's load factor reached 83.7%, 4% more than in the corresponding quarter last year.
El Al's market share at Ben Gurion Airport was 32.8%. The number of passengers there flying El Al rose 7%, while passenger traffic at Ben Gurion increased by 17%.
El Al's pre-tax loss in the first quarter was $39 million, compared with $34 million in the first quarter of 2016.
24 May 2017
Air Asia profits plunge 94%
News reports state that AirAsia X Bhd (AAX), the long-haul, low-cost affiliate of AirAsia Bhd, saw its net profit plunge 94.2% to RM10.34 million or 0.2 sen a share in the first quarter ended March 31, 2017 (1QFY17) from RM179.49 million or 5.3 sen a share a year ago, on higher operating expenses including fuel prices, which rose to US$66 per barrel compared with US$64 per barrel in 4QFY16.
Total operating expenses rose 27.6% to RM1.12 billion in 1QFY17 from RM879.05 million in 1QFY16. Out of this total, aircraft fuel expenses amounted to RM377.69 million in 1QFY17, up 55.4% from RM243.06 million a year ago.
The airline also realised considerably lower foreign exchange gain of RM3.41 million in 1QFY17 compared with RM122.19 million in 1QFY16.
19 May 2017
Singapore Airlines shares sharpest dive since 2008 after loss
News reports state that shares in Singapore Airlines are eyeing their biggest one-day drop since the financial crisis after the carrier revealed its first quarterly loss in more than seven years and announced it would reintegrate its cargo division into the broader group.Hampered by “intense competition”, rising cost pressures and the reinstatement of a fine related to anticompetitive behaviour in its cargo division, Singapore Airlines (SIA) posted a surprise loss in the fourth quarter and said it would conduct a strategic review of its portfolio.Group revenues in the three months to March 31 were basically flat from a year earlier at S$3.72bn ($2.7bn), it revealed after close of market on Thursday. Rising cost pressures cut into operating profit, which fell 82 per cent to S$27.6m from a year earlier.But the biggest hit to net profit was a S$132m provision relating to a European anticompetition ruling against its cargo unit.The bottom line result was a loss of S$138.3m – its first quarterly loss since the September quarter of 2009 – well below analysts’ expectations for a profit of S$54.3m and compared to S$224.7m a year ago.For the full year, revenue fell 2 per cent to S$14.87bn and net profit sank 55.2 per cent to S$360.4m.SIA made the S$132m provision after revealing in March the European Commission decided to reinstate a decision to fine several airlines a combined €776m for their part in air cargo price-fixing cartel from December 1999 to February 2006. The company also accounted for an expected refund of a S$117m fine from the previous year, but this was not forthcoming.SIA shares were down 6.4 per cent during lunchtime trade in Singapore at their lowest level since the end of March. Shares were facing their biggest one-day drop since November 6, 2008 when they sank 7.2 per cent, and had been off as much as 6.7 per cent on Friday.Of the outlook, the carrier said “intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields”, while fuel prices were expected to remain “volatile in the near term”.
18 May 2017
Virgin Australia loss blow out
News reports state that Virgin Australia has blown out to a $69 million loss in the third quarter, with the airline blaming weak passenger demand, freak weather events and other factors.
The loss is $10 million deeper into the red compared to the same quarter last year.
Virgin said its fleet simplification program, unfavourable movement in the US dollar, Cyclone Debbie in Queensland and its budget arm Tigerair being forced off its Bali routes had all hurt earnings.
However, Virgin said it was continuing to improve debt levels, paying down $200 million in the third quarter. The group's net debt has been cut by 33 per cent so far this financial year.
Its cash balance has meanwhile grown 50 per cent to $1.3 billion over the past 12 months.
Virgin said it expected its underlying performance in the fourth quarter to be better than in 2016.
On an underlying basis, Virgin ran at a $62.3 million loss in the quarter compared to a $18.6 million loss in 2016.
For the nine months to March 31, Virgin is running at a $90.6 million bottom line loss and a $20.2 million underlying loss.
16 May 2017
SAA third year in a row losses
News reports stater that NATIONAL airline SAA’s financial troubles are far from over after the carrier projected a loss of R853million in the 2016/17 financial year, which ended in March.
In its corporate plan for 2017/18, which was tabled in Parliament yesterday, SAA said it was implementing cost-cutting measures to recover the losses.
This is the third year running in which SAA has suffered a financial loss.
8 May 2017
Air Canada loss from profit last year
News reports state that Air Canada on Friday reported a loss in the first-quarter, compared with a profit a year earlier, hurt in part by fuel costs that rose 48 per cent.
Canada's largest airline said its net loss was C$37 million(S$37.6 million), or 14 Canadian cents per share, in the quarter ended March 31, compared with a net income of C$101 million, or 35 Canadian cents per share, a year earlier.
The Montreal-based airline's operating revenue increased 8.9 per cent to C$3.64 billion.
8 May 2017
Mega Maldives Airlines suspends all operations
News reports state that Mega Maldives Airlines last week announced the temporary suspension all operations as part of a “restructuring and recapitalisation” effort while its management and administrative functions remain unaffected.
As a result of the surprise announcement, officials from other airlines said that they are currently fielding seat queries from tour operators for Chinese clientele who were supposed to fly on Mega Maldives.
Established in 2010, Mega Maldives is largely dependent on the Chinese market and has been hit by falling arrivals from the country. Arrivals from China, Maldives largest inbound market, fell 7.8 per cent to 73,135 in 2017 and 9.8 per cent in 2016.
4 May 2017
Air France KLM losses widen
News reports state that Air France-KLM (AFRAF.PK) reported Thursday that its first-quarter group net result was negative 216 million euros, wider than last year's loss of 155 million euros.
Operating result was negative 143 million euros, compared to last year's negative 99 million euros, however, increased to 554 million euros from 531 million euros a year ago.
3 May 2017
Icelandair shares fall on heavy losses
News reports state that National flag carrier Icelandair has seen 10% wiped of the value of its shares in just over two days, after posting big losses for the first quarter of 2016.
Last Thursday, the Icelandic airline published results showing a loss of some ISK 20 billion (approx. €140 million) for Q1 2016, despite an increase in revenue and passenger numbers.
Shares in the airline began to fall as soon as markets opened on Friday and had lost 10.6% of their value by close yesterday.
3 May 2017
Alitalia starts bankruptcy proceedings for second time
News reports state that Alitalia started bankruptcy proceedings for the second time in a decade after workers rejected job cuts and concessions linked to a €2bn ($2.2bn) recapitalisation plan aimed at salvaging the cash-strapped Italian airline.
Shareholders voted unanimously to file for special administration, the carrier said in a statement following a meeting on Tuesday. Under Italian law, the government will have to provide stop-gap funds to maintain operations and will appoint supervisors to turn around the carrier or order its liquidation.
With the move, the board of directors have “acknowledged the serious economic and financial situation of the company,” the company said in the statement.
The administrators will take over the business and present a new strategy that may entail asset sales, reduced operations and job cuts aimed at making the airline viable within two years. If a turnaround isn’t possible the administrators may order the carrier to be liquidated.
Alitalia, whose major shareholders are Abu-Dhabi based Etihad Airways and Italian banks, last week said it had exhausted all options to stay solvent after workers nixed a recapitalisation plan involving 1,600 job cuts. Alitalia, which has 12,500 employees, has been stumbling in the wake of a previous bankruptcy in 2008.
Italian finance minister Pier Carlo Padoan said last week that the government will not pump more cash into boosting the airline’s capital.
Alitalia is “a private company” and its fate is “in the hands of shareholders and management," Mr Padoan told lawmakers in Rome on Thursday. Economic Development Minister Carlo Calenda on 30 April said he hopes the carrier can be sold as "a whole, not in pieces."
Alitalia’s years of underperformance have diminished its standing within the Italian economy and the aviation industry. Carrier’s share of the Italian market slumped to 18 per cent as of 2015 from 23 per cent in 2007, according to an analysis by Ugo Arrigo and Andra Giuricin of Milan Bicocca University.
28 April 2017
Lufthansa first loss since 2008
News reports state that Germany's Lufthansa played down prospects of acquiring more airlines on Thursday and said it would work harder on costs after it swung to a first-quarter profit, its first since 2008 in what is traditionally a weak quarter for airlines.
With Alitalia reviewing its future after workers rejected a rescue plan and Air Berlin expected to report higher losses for 2016 on Friday, speculation has swirled that Lufthansa could be in the frame to take on the two carriers.
Lufthansa has been driving consolidation among European airlines recently, taking over Brussels Airlines and leasing 38 planes and crew from struggling Air Berlin, to grow its budget division Eurowings.
But Chief Financial Officer Ulrik Svensson said on Thursday that Lufthansa was not looking to take over Alitalia and repeated that debt, anti-trust concerns and cost levels remained obstacles to further Air Berlin consolidation.
Budget rival Norwegian Air Shuttle also said on Thursday it was not interested in any Alitalia assets.
25 April 2017
GLO Airlines files for bankruptcy
News reports state that GLO Airlines, a New Orleans public charter airline that offers nonstop flights to Destin, Fla. among other regional destinations, has filed for bankruptcy protection. The filing is the latest development in a dispute between the airline and the company that operates its planes.
FlyGLO LLC, the airline's parent company, filed Sunday (April 24) in federal bankruptcy court in New Orleans, asking a judge to allow it to continue offering flights beyond Thursday, the date its flight management company has said it intends to cancel its contract with the airline.
The management company claims GLO has fallen behind on payments it is owed. GLO in a Monday statement called the decision to cancel the contract "entirely unjustified" and blamed the management company for violating contract terms and providing poor service.
It is not yet clear what will happen to GLO customers who purchased tickets for flights after Thursday if a judge lets the contract dissolve. The airline's statement sought to reassure customers its business model is sound, but offered few details as to what would happen to ticket holders who could be affected by the dispute.
New Orleans nonstop flight to Destin back on sale
New Orleans nonstop flight to Destin back on sale
Flights start in June.
"We are taking this step now because we value our customers too much to provide inferior service," CEO Trey Fayard said in the statement. "It was a difficult decision, but a necessary one to protect everyone involved. We look forward to promptly and successfully emerging from reorganization in the near future."
25 April 2017
Air Carnival grounded
News reports state that Low-cost carrier Air Carnival promoted by CMC Group (Coimbatore Marine College) has stopped plying its aircraft from April 6, amidst talk of its promoters off-loading their stake.
The aircraft was grounded as the engineers went on a two-day strike demanding their salary dues.
The regional carrier, which started operations in July last with one ATR- 72 aircraft, is said to have parked the aircraft in Hosur.
The owners of the aircraft, Elix Aviation Capital, is now desperately trying to retrieve the aircraft documents to the aircraft from the promoters of Air Carnival.
Sources in the know of the development told BusinessLine that the lessor has been after the promoter to retrieve the papers for a week now, in vain.
Manufactured in 2007, the aircraft is said to have been operated by Kingfisher Airlines before Air Carnival took it on lease.
21 April 2017
Volaris posts a net loss of US$73 million
News reports state that Mexican ultra-low-cost carrier (ULCC) Volaris reported a MXP1.4 billion (US$72.7 million) net loss for the first quarter of 2017, reversed from a MXP602 million net profit in the year-ago quarter.
Volaris CEO Enrique Beltranena said the company "faced a challenging market and geopolitical environment" during the quarter.
Fuel prices increased significantly compared to a year ago, Volaris reported, with the company's average economic fuel cost per gallon rising 67.8% year-over-year (YOY) to MXP37.1 (US$2) per gallon, versus MXP22.1 per gallon in 1Q2016. Volaris hedged 52% of its first-quarter 2017 fuel consumption, at an average strike price of US$1.64 per gallon.
20 March 2017
Wings of Alaska ceases operations
News reports state that Wings of Alaska a scheduled and Charter service has ceased to trade.
17 March 2017
Cathy Pacific first loss in 8 years
News reports state that Cathay Pacific Airways on Wednesday reported its first full-year loss since the 2008 global financial crisis, dragged down by overcapacity, a strong Hong Kong dollar and mounting competition from mainland Chinese carriers.
Shares of Hong Kong's flag carrier fell almost 5 percent after the news. Cathay had warned its results for the second half of 2016 would be weak as it battles falling demand for premium class seats on long-haul routes. It now expects the outlook to remain challenging in 2017 as the headwinds continue.
Acknowledging the competitive landscape, Cathay recently undertook what was the biggest review of its business in two decades and said it would cut jobs and consider shifting some flights to its short-haul arm as part of a three year programme.
For 2016, the Hong Kong carrier posted a net loss of HK$575 million ($74.01 million), versus a profit of HK$6 billion a year ago. This is only the third time the company has posted a full-year loss since it was founded in 1946.
The results fell significantly short of an average estimate for a net income of HK$384.86 million from 13 analysts polled by Thomson Reuters. Thomson Reuters Starmine SmartEstimate had forecast a much lower profit of HK$27.10 million.
"The operating environment for our airlines was difficult in 2016, with a number of factors adversely affecting their performance. Intense and increasing competition with other airlines was the most important," Chairman John Slosar said. "We expect the operating environment in 2017 to remain challenging."
Group revenue dipped more than 9 percent to HK$92.75 billion, while passenger yields - which refers to the average fare paid per mile per customer - tumbled 9.2 percent to $0.54. Yield on cargo services fell 16.3 percent.
15 March 2017
Turkish Airlines posts a $13 million loss
New reports state that Turkish Airlines is targeting a return to its earlier pace of gains in passenger numbers by next year as the effects of terrorism and political turmoil wane after causing a loss in 2016.
Turkish Airlines will post a “moderate” increase in passenger numbers this year and “from 2018 onwards, we will be seeing our historical growth rates,” Chairman Ilker Ayci told analysts on a conference call Monday.
Once the rising star of the aviation industry, the Istanbul-based carrier, formally known as Turk Hava Yollari AO, posted a 47 million-lira ($13 million) net loss last year compared with profit of 3 billion liras in 2015, its first annual deficit since 2000. Passenger numbers rose 2.5 percent in 2016, slowing from an average yearly gain of about 16 percent from 2011 through 2015, according to an investor presentation.
Tourist and business sites in Turkey have been terrorist targets in the past year and a half, including an assault by suicide bombers in late June at Istanbul’s Ataturk Airport that killed 41 people. Economic sanctions by Russia after Turkish forces shot down one of its fighter jets reduced traffic from that market in the first half of 2016. The airline’s efforts to recover from those incidents were hampered by an unsuccessful insurgency in the military to overthrow President Recep Tayyip Erdogan on July 15 that killed about 250 people.
11 March 2017
Citywings goes into liquidation
News reports state that Citywings has announced it’s gone into liquidation.
It’s after two weeks of disruption for the Island-based company following the grounding of airline Van Air in late February.
A statement from Citywing directors this evening (March 10) says the company has found it difficult to source aircraft to continue to offer its scheduled services.
They say they have taken the step with ‘much sadness and deep regret’.
Passengers have been advised not to turn up for flights tomorrow as there won’t be anyone on hand to assist with enquiries.
1 March 2017
Air Costa suspends operations
News reports state that Air Costa on Tuesday temporarily suspended its operations, becoming the second regional airline in less than eight months to abruptly stop services after Air Pegasus.
At the same time, Air Pegasus is unlikely to resume services from tomorrow as announced in January when new investors were roped in.
Facing financial issues with the lessors, Air Costa has decided to ground its two leased aircraft, Embraer E190, which can seat over 100 passengers. The airline has only these two planes in its fleet.
Rival Air Pegasus too had to shut operations for similar reason in July 2016.
“We have taken a two-day halt in our operations because of the financial issues with the lessors. We have been trying to raise funds for the past three months and we are waiting for the same by Thursday,” Air Costa spokesperson Kavi Churasia told PTI.
Prior to suspending its flight services, Air Costa had been operating 16 flights per day to eight destinations.
“The talks with one of the investors are at a very advanced stage. This is temporary halt, starting from today.
We are trying to resolve the issue,” Mr. Churasia said
1 December 2016
Tiara Air declared bankrupt
News reports state that Tiara Air has been declared bankrupt.
23 November 2016
Transasia Airways shuts down
News reports state that TransAsia Airways, the Taiwan-based airline that had two fatal crashes within seven months of each other, said in a stock exchange filing on Tuesday that it was shutting down.
Its shares and flights had been suspended since Monday.
The company has continuously lost money, and its shares have been sliding since the crashes in 2014 and 2015 raised questions about the safety of its planes.
In July 2014, one of its planes hit a building while landing in stormy weather in the Penghu Islands, about 30 miles west of Taiwan’s main island. Forty-eight people were killed.
Another plane crashed into the Keelung River in Taiwan in February 2015, killing at least 35 people. The pilot of that plane acknowledged later that he had shut off the wrong engine, according to a report on the crash. The report also said that he had failed a simulator test the previous year but passed a makeup exam.
16 November 2016
Mango Airlines makes a loss
News reports state that Cape Town – Domestic low-cost carrier Mango Airlines has officially celebrated its 10th birthday on Tuesday as its financial statements have been released to parliament.
According to an exclusive report published by Fin24, the low-cost airline, which is 100% owned by state airline South African Airways - has made a net loss of R36.9m in the year ended March 2016.
Fin24 was given a copy of Mango’s 2014/15 and 2015/16 annual financial results on Tuesday, after South African Airways (SAA) chairperson Dudu Myeni was requested to hand over various documents to the Standing Committee on Finance by the Department of Finance. It is the second time in 10 years that the celebrated airline has not made a profit.
15 November 2016
Nok Air losses in a tailspin
News reports state Nok Air slipped further into the red in the third quarter with a net loss of 1.07 billion baht, widening from a 652.62-million-baht loss in the same period last year. The result brought cumulative losses...
13 November 2016
Air Berlin losses mount
News reports state that Air Berlin plc(AIBEF.PK) reported that net result for the third quarter of 2016 was negative 45.6 million euros compared to positive 56.2 million euros in the third quarter in 2015. Loss per share was 0.45 euros compared to earnings per share of 0.17 euros in the prior year.
Pre-tax loss were 45.8 million euros compared to Pre-tax earnings of 60.5 million euros in the same quarter of the previous financial year.
The operating result or EBIT amounted to negative 17.3 million euros compared to positive 81.4 million euros in the prior year.
EBITDAR decreased to 164.3 million euros from 256.1 million euros in the prior year.
The financial result amounted to negative 28.7 million euros compared to negative 20.9 million euros in the same quarter of previous financial year.
Group revenue for the quarter declined to 1.23 billion euros from 1.30 billion euros in the prior year.
11 November 2016
Turkish Airlines loss
News reports state that Turkish Airlines reported a net loss of $463 million for the first nine months of the year compared to a net profit of $877 million a year ago.
In a statement the Turkish flag carrier blamed political and economic instability in Europe and Middle East as well as the increased perception of global and regional risks which caused negative impact on aviation demand and placed pressure on yields. Moreover, increased capacity, led by low fuel prices and increased competition, also affected ticket prices and total revenue.
Only Africa and the USA maintained revenue levels for both passenger and cargo traffic
During the nine-month period, the carrier transported 48.3 million passengers, up 4%, on 357,000 flights. ASKs increased 14%; RPKs were up 8.2% and load factor was down to 74.5% from 79% last year.
2 November 2016
Virgin Australia losses widen
News reports state that Virgin Australia, like Qantas, is being hit by weak demand for domestic airline seats.
The airline today posted an underlying loss before tax of $3.6 million for the first quarter of the financial year, a fall of $12.1 million on the same period the year before.
The statutory loss after tax for the quarter was $34.6 million. This includes the impact of restructuring charges.
A short time ago, Virgin shares were down 2% to $0.235.
“This result was impacted by subdued industry trading conditions during the quarter, particularly in the domestic market, which affected revenue,” the airline said in a quarterly update.
31 October 2016
SAA losses
News reports state that South African Airlines (SAA) has reported a loss of R5.6 billion for the financial year of 2014/2015 and a further R1.5 billion for 2015/2016.
SAA Chairperson Dudu Myeni was briefing the media after releasing the airline's financial statements. She says the state-owned carrier needs "urgent and radical" action if it is to return to profitability.
This would require aggressive cost containment and reviewing flight routes. She says the new board appointed in September together with other senior executive members of SAA are doing everything possible to make the airliner financially stable.
She says they are also looking to stabilise the liquidity position of the SAA.
"While there is still a great deal of work to be done, the board the shareholder and management are committed to doing everything possible to return the airline to financial sustainability. Although the airliner has reduced its losses. The board recognises on the issue of reporting losses cannot persist and radical actions are required."
29 September 2016
Air Berlin in financial peril as cut backs take place
News reports state that Etihad, which owns 29 percent of Air Berlin, may have finally decided it no longer wants to subsidize mounting losses. If this deal happens, Air Berlin will still be around, but at a more manageable size.
21 September 2016
Seaport Airlines goes into liquidation
News reports state that Seaport Airlines has ceased all operations after filing for bankruptcy.
The Portland-based company operated out of Memphis' Signature Flight Support and offered service to the cities of Hot Springs and Harrison, Arkansas.
Customers who have a ticket from the airline can apply for a refund through the credit card company.
Scott Brockman, President and CEO of the Memphis-Shelby County Airport Authority, said, “All air service is important to our operations at MEM, and we will work to assist these affected cities to maintain their connection to Memphis and the Mid-South.”
20 September 2016
Shares tumble and losses grow in FastJet
News reports state that shares in budget airline Fastjet slumped this morning after it reported deepening losses and a heavily eroded cash pile after its ambitious drive to fly more planes failed to pay off.
The Africa-focused airline reported operating losses for the first half of this year of $31m, almost three times as high as its $12.8m loss in the same months last year. As a result the company swung from a modest pre-tax profit of $6.4m in the first half of 2015 to a loss of $15m for the first six months of this year.
The stock plummeted more than 17pc to 20.95p following the company's results.
The deepening losses have raised concern over Fastjet's cash position, which has plummeted from $71m in June last year to $3.9m by the end of the first half of 2016. The company has since raised a further $20m to give itself more headroom.
Gerald Khoo, an analyst with Liberum, said: “Challenging economic conditions in Tanzania and overly ambitious capacity growth resulted in a collapse in load factors. Neither passenger numbers nor revenue kept pace with the additions to seat capacity, and losses have grown.”
15 September 2016
SAA loss 4.7 bilion loss
News reports state SAA has finally tabled a financial report for the 2014/15 financial year before Parliament, showing a multi-billion rand loss for the period.
The results confirm statements from finance minister Pravin Gordhan earlier in the week, saying that the airline suffered a R4.7 billion loss in the year. According to Gordhan, the airline faces another R1.8 billion loss in the 2015/16 period.
The airline has been making a loss since 2012, with the last available results, from 2013/14 showing the group post a loss of R2.59 billion. The airline has accrued losses of over R18 billion over the past 10 years.
SAA has also received a number of government bailouts worth at least R14.4 billion over the past 5 years, as part of its turnaround strategy, but was blocked from receiving further grants by Gordhan until a new board was established.
Earlier in the month, a new SAA board was elected, with president Jacob Zuma’s friend, Dudu Myeni still at the helm – which was followed by National Treasury granting the airline another R5 billion guarantee with strict conditions.
The results tabled before parliament are only the preliminary results for SAA. According to the finance minister, the auditors of the report raised a number of technical issues, which need to be reviewed by technical experts before the results can be finalised.
Revenue for the group was down to R28.5 billion from R28.7 billion previously, while operating expenses were up to R31.6 billion from R30.6 billion in 2014.
5 September 2016
SAFI Airways is grounded due to debts
News reports state that Afghanistan's largest private airline has been forced to suspend operations after it failed to clear outstanding debt and taxes.
The Afghan civil aviation authority ordered Safi Airways on Sunday to pay 1.15 billion Afghani ($1.7 million) before it can regain permission to resume services and sell tickets.
"The finance ministry decided to suspend Safi Airways activities in Afghanistan," the Independent Directorate of Civil Aviation said. It added that authorities can also stop the company's executives from travelling outside Afghanistan.
The finance ministry has allowed the tax office to seek court approval to confiscate and sell Safi Airways property if it fails to meet the payment deadline.
The airline, which was founded in 2006, currently flies three domestic and four international routes. It is the country's second-largest airline after national carrier Ariana Afghan Airlines.
Safi Airways transports many expatriates and benefits from the presence of non-governmental organisations, private security companies and other foreign entities in Afghanistan.
* With immediate effect policies with IPP for tickets or insurance policies issued from 5th September will be excluded from cover.
1 September 2016
Aero suspends operation indefinitely
After months of skeletal operations which saw the airline’s schedules shrinking to a very low ebb, Nigeria’s 2nd biggest indigenous airline, Aero Contractors, yesterday announced the suspension of its scheduled services with effect from today, September 1.
The Chief Executive Officer of the airline, Capt. Fola Akinkuotu, said the development was part of the strategic business realignment to re position the airline and return it to profitability.
The suspension of the airline’s services was the culmination of its seemingly unending operational woes which necessitated its take-over by the Assets Management Corporation of Nigeria (AMCON).
Despite AMCON’s intervention in February and the appointment of a Receiver-Manager, Mr. Tunde Gbenro and then Capt. Akinkuotu, the airline owned by the Alex Ibru family could not rise on its feet as its operations continued to shrink.
Aero recently suspended its operation to Accra, Ghana, a decision it attributed to unavailability of aircraft.
However, the airline announced outright suspension of scheduled services with effect from today. It has asked the affected staff to proceed on leave of absence indefinitely.
* Under all IPP policies cover is excluded for all tickets issued under IPP policies and travel insurance policies issued from today.
23 August 2016
Turkish Airlines first half loss of $644 million
News reports state that Turkish Airlines has said it posted a loss of 1.9 billion Turkish Liras ($644.4 million) in the first half of 2016, while also revising its year-end passenger and revenue target, Reuters has reported.
Analysts had already expected the parity losses to hit the company’s balance sheet in the second quarter, as a dramatic decrease in the number of tourist arrivals and rising competitiveness have put airlines’ profitability under pressure.
While Turkish Airlines’ sales in the second quarter rose to 7.1 billion liras ($2.4 billion) from 6.8 billion liras in the same period of 2015, the company suffered a loss of 656 million liras in the second quarter, it stated on Aug. 19. The company posted a net profit of 661 million liras in the same period last year.
The national carrier’s sales revenue rose to 13.5 billion liras ($4.4 billion) in the first half of the year with a 10 percent increase from the same period of 2015, but it also posted a 1.9 billion-lira loss in the same period.
In this vein, Turkish Airlines revised its year-end target to 63.4 million passengers, down from 72.4 million. It also revised its year-end sales revenue target to $9.5 billion, from 12.2 billion, and its EBITDAR margin from 20-22 percent to 12-14 percent.
Turkish Airlines, which had estimated some 12 percent of increase in its total fuel consumption, said its average euro-dollar parity prediction is at about 1.11, its average dollar-lira parity prediction is at 3.00. The cost of jet fuel costs, including hedges, is currently at around $577 per ton, it stated.
17 August 2016
Cathy Pacific profits plunge
News reports state that Hong Kong-based carrier Cathay Pacific has reported an 82% drop in half-year profits amid fierce competition and the economic slowdown in China.
The airline's net profit in the first half of the year dropped to 353m Hong Kong dollars ($45.5m; £34.9m), down 82% from the same period last year.
Revenue for the six months to 30 June fell 9.2% to HK$45.68bn.
Cathay is facing challenges on many fronts - air fares, competition from other carriers and fuel hedging losses.
The airline attributed the sharp downturn to slower global economic growth dragging down corporate travel and hitting sales of lucrative premium class seats.
"The operating environment in the first half of 2016 was affected by economic fragility and intense competition," chairman John Slosar said in a statement.
"The slowdown in the mainland China economy caused restrictions to be placed on corporate travel. This adversely affected premium class demand, particularly on long-haul routes," the company said in its report.
13 August 2016
LATAM $92 million second quarter loss
News reports state that LATAM Airlines , Latin America's largest airline, reported a net loss in the second quarter of $92 million, wider both than expected and compared to the same period a year ago.
The airline has racked up repeated losses since it was formed in the 2012 merger of Chile's LAN and Brazil's TAM, hamstrung by Brazil's economic problems and negative currency effects.
10 August 2016
Air Berlin losses widen
New reports state that Air Berlin PLC reported a net result in the second quarter of 2016 of a loss of 89.1 million euros compared to a loss of 37.5 million euros in the corresponding quarter in prior year. Loss per share was 0.82 euros compared to a loss of 0.37 euros. Operating result (EBIT) was a loss of 62.7 million euros compared to a loss of 15.9 million euros, in the prior year's quarter.
Group revenue was 970.6 million euros in the second quarter compared to 1.07 billion euros, in the second quarter of prior year. The Group said capacity cuts and adverse geopolitical events in the competitive European market during the second quarter of 2016 led to the 9.4 percent decrease in sales.
5 August 2016
Virgin Australia posts a $225 million loss after restructuring
News reports state that Virgin Australia has plunged to a $225 million full-year loss, having bitten the bullet on restructuring its business and fleet.
The vast bulk of the loss comes from $440.5 million in restructuring charges as the airline has sought cost-cutting measures, including the simplifying of different aircraft in its fleet from nine to six.
1 August 2016
Air Pegasus suspends operations
News reports state that regional carrier Air Pegasus has cancelled many of its flights indefinitely. A spokesperson said the flights were cancelled due to "technical" issues and denied the company had suspended operations. Sources, however, said that lessors had taken repossession of some of its aircrafts due to nonpayment of dues.
Despite repeated attempts, Air Pegasus managing director Shyson Thomas was not available for a comment.
Air Pegasus, which has three 72-seater ATR aircrafts, operates out of the Bengaluru airport and connects nine cities in southern India, including Chennai, Mangaluru, Thiruvananthapuram and Goa.
The airline's website showed that many flights on Wednesday were cancelled, and several for the coming days have also been cancelled. Thomas' company Decor Aviation Private, one of the largest domestic airport ground handling companies, started Air Pegasus last year. Decor provides services across 11 major airports in India.
28 July 2016
Virgin Australia full net loss doubles
News reports that Virgin Australia says its full-year net loss more than doubled from a year ago, hurt by the one-off costs of a restructure to cut capacity amid stiff competition.
Australia's second-biggest airline will post a $224.7 million loss next month due to the cost of overhauling the airline, it said in a trading update to the Australian stock exchange. That compares with a $93.8 million loss in 2014/15.
25 July 2016
Kenya Airways country's worst ever loss
News reports state that Kenya Airways on Thursday highlighted the scale of the turnround task at the company when it broke its own record for the country’s worst ever corporate results.
The airline reported a net loss of Ks26.2bn ($258m) for 2015-16, up from Ks25.7bn in the previous financial year, as its results were hit by a series of one-off items including charges linked to a poor fuel hedging policy.
Kenya Airways is seeking to recover from a failed expansion strategy, and, in spite of the record-breaking loss, analysts drew encouragement from an improvement in the company’s underlying performance.
The airline’s operating loss narrowed from Ks16.3bn in 2014-15 to Ks4.1bn in 2015-16, and Eric Musau, analyst at Standard Investment Bank, said: “From an operating perspective I think they’re really improving. They’re headed in the right direction and I don’t think they have anything major left to clear.”
But shares in Kenya Airways, which has now recorded four successive years of losses, fell more than 8 per cent on Wednesday to Ks4.35. The stock has dropped 87 per cent in the past five years.
22 July 2016
Lufthansa shares plunge on profit warning after terrorist attacks hit bookings
New reports state that German airline Deutsche Lufthansa AG warned that a series of terrorist attacks have caused passengers to scrap travel plans, leading to an expected decline in full-year earnings.
Europe has been hit by a string of terrorist attacks. which can depress bookings. Last week, a truck driver in Nice killed at least 84 people when he plowed into revelers. A few weeks earlier, Istanbul's Atatü rk Airport was hit by a terrorist attack.
Both incidents were linked to Islamic State sympathizers. The Islamic State also claimed responsibility for an ax attack on train passengers in Germany this week. A terrorist attack against Brussels airport in March caused Lufthansa to delay plans to take over Brussels Airlines.
The company said its board "regards a complete recovery as not likely anymore."
Shares in the airline dropped nearly 7% in early trading on Thursday.
21 July 2016
Air Astana first quarter loss
News reports state that Air Astana recorded a net loss of US$6.6 million, and an operating profit of US$0.975 million, for the first half of 2016.
Operating revenue fell by 30% to US$275 million, driven by a signification devaluation of the Kazakh Tenge in comparison with the first half of 2015, and by weaker regional travel markets in the wake of commodity price falls. Passenger numbers fell by 7% to 1.69 million.
23 June 2016
VLM Airlines - flights cancelled as it goes into Bankruptcy
News reports state that Belgian air carrier VLM Airlines announced Wednesday the company has filed for bankruptcy and that all flights moving forward have been canceled.
VLM Airlines filed a formal application asking for credit protection in May in order to avoid filing bankruptcy for six months. As time went on, the airline stated that it didn’t have enough time to make up for the number of pilots who left the company or bring in the additional financial resources.
In addition, VLM Airlines also reported that its planned sale-leaseback deal for several aircraft in its fleet fell through due to an unsuccessful re-capitalization, as well as several charter clients canceling contracts.
“We realized that all restructuring measures we had implemented from January onward had been come too late for a sustainable restructuring,” VLM Airlines CEO Hamish Davidson said in the statement. In addition, the airline tweeted out the following: "vlm regrets to inform that it has filed for bankruptcy, all flights have been canceled."
18 June 2016
Nordica airlines post 15 million Euro loss for first year of operation
News reports state that Nordic Aviation Group AS, the Estonian national carrier using the Nordica brand, projects a turnover of 50 million euros and a loss of 15 million euros for its 15-month first year of operation, CEO Jaan Tamm told the daily Postimees.
When Nordica was established the first-year loss was projected at 9 million to 23 million euros, Tamm said and added that he personally had hoped for a single-digit loss number.
According to the company's current plan, the loss is expected to decline from 15 million to 6 million euros next year and shrink further to 3 million euros the following year, after which Nordica might break even or even make a profit in 2019, Minister of Economic Affairs and Infrastructure Kristen Michal said.
Nordic Aviation Group was established last fall to ensure continued direct flights out of Tallinn in the event of Estonian Air's bankruptcy. The new airline started flights in co-operation with Slovenia's Adria Airways after Estonian Air went broke in the wake of a European Commission decision that deemed state aid provided to the company to be unlawful and ordered it to be returned, which Estonian Air was unable to do.
7 June 2016
Solomon Airlines grounds all flights
News reports state that Solomon Airlines has reportedly grounded all of its domestic and international flights, effective immediately.
The airline’s board and CEO are reported to have made the decision after not receiving overdue payments from the country’s finance department.
Radio New Zealand reports charter flights and seats for government MPs have remained unpaid, placing pressure on the airline’s ability to operate.
The CEO is reported to have claimed the airline has been operating “under duress”.
The airline has yet to respond to questions from Pasifik News, but a spokesman for Solomons Prime Minister Manasseh Sogavare says: “The government is working to address the situation and a further statement will be issued shortly.”
31 May 2016
Aegean losses widen 1st Quarter 2016
News reports state that Aegean Airlines widened its loss in the first quarter of 2016 compared to the same period a year earlier as sales grew 7.0 percent, Greece's largest carrier said on Thursday.
The company reported a net loss of 21.5 million euros (16.8 million pounds) in the first three months of the year versus a loss of 8.3 million in the same period last year.
17 May 2016
Nok air US$10.8 Million loss in Q1
News reports state that Thailand-based low-cost carrier (LCC) Nok Air reported first-quarter net loss of THB379.9 million (US$10.8 million), reversed from net profit of THB55.6 million in the year-ago period.
First-quarter revenue fell 2.04% to THB3.38 billion; operating costs for the quarter were THB3.55 billion, up 10.8% from the year-ago period.
The LCC attributed increased costs to the rise of aircraft lease rental and ongoing maintenance costs from a recent fleet expansion. Additional pressure came from "domestic low-cost carriers still facing challenges from [local] price wars and oversupply."
The company also said the lower-than-expected results, and the revenue decrease, were "mainly due to flight frequency cuts [resulting in] a 7.1% decrease in ASKs and a 10.3% drop in the number of passengers carried as a result of the reduction in pilots [numbers]." The carrier experienced significant flight disruptions in February as a result of new working conditions leading to a pilot strike.
15 May 2016
VLM Airlines files for bankruptcy protection
News reports state that The Belgian airline based in Antwerp has officially asked the Commerce Court in Antwerp protection against its creditors for a period of six months to avoid bankruptcy time to restructure.
"VLM Airlines currently undergoing a major restructuring to ensure the future of the company and its employees," said the daily De Tijd Hamish Davidson, CEO of VLM Airlines. "Our customers, shareholders and our workers are our top priorities, we decided to introduce this procedure to make sure we have time to do the necessary, "he added.
The announcement was somewhat surprised when the specialist VLM had said in a statement on April 11 that the latest figures showed an improving trend with occupancy rates rose in April and operational yields higher. Recall Besides that last February, VLM Airlines launched three routes in Germany from the airport Friedrichshafen. She has based three Fokker 50 flying to Berlin Tegel, Dusseldorf and Hamburg, with two round trips per day on each route. VLM had taken these roads after the cessation of activity by the Austrian regional airline InterSky in November 2015. It was decided almost simultaneously to remove two routes deemed unprofitable early 2016, linking Antwerp to Geneva and Birmingham.
According to the daily De Tijd, VLM was deadlocked and had options other than to seek that protection against bankruptcy for his KBC bank had blocked its accounts in midweek. Many suppliers would not be paid, some Antwerp Airport as having the same notice for an unpaid debt of 100,000 euros.
* Cover under IPP's policies for all policies and tickets issued on or after the 14th May will not be covered.
5 May 2016
Air France share down sharply on loss
News reports state that Franco-Dutch airline group Air France-KLM echoed recent industry warnings of downward pressure on ticket prices, sending its shares sharply lower after reporting a narrower first-quarter net loss on a light rise in revenue.
The stock was down 4.6% in afternoon trading, following the previous day’s downward lurch in shares in Deutsche Lufthansa AG after the German carrier warned of possible lower fares amid a tough trading outlook for European airlines. They are curtailing growth plans and seeking new ways to reduce costs to deliver on promises of improving earnings.
Air France-KLM said its net loss narrowed to €155 million ($178 million) in the three months to the end of March from a loss of €559 million in the same period in 2015, on sales that rose 0.4% to €5.61 billion. Analysts polled by FactSet expected a net loss of €314 million on sales of €5.53 billion.
The airline operator said that it faces “a high level of uncertainty” for the rest of the year, with “downward pressure on unit revenue” as well as adverse exchange rates likely to offset much of the savings on fuel and other costs.
4 May 2016
Lufthansa dive into the red with loss
News reports state that Lufthansa shares nosedived on Tuesday after the German airline said one-off effects and price pressures pushed it into a loss in the first three months of the year.
Lufthansa shares were among the biggest losers in morning trade on the Frankfurt stock exchange, shedding nearly six per cent in a market that was down by around 1.4 per cent.
Lufthansa said in a statement that it booked a net loss of 8.0 million euros ($9.2 million) in the period from January to March, compared with a profit of 425 million euros a year earlier.
But the airline pointed out that the year-earlier figure had been boosted by one-off financial gains.
At an underlying level, earnings before interest and tax (EBIT) showed a loss of 49 million euros, compared with a much deeper loss of 144 million euros a year earlier.
First-quarter revenues slipped by 0.8 per cent to 6.92 billion euros.
2 May 2016
Virgin Australian 3rd quarter losses and capacity cuts
News reports state that Investors are punishing Virgin Australia for cutting capacity and forecasting a loss in the second half of the financial year.
Shares in the airline tumbled 4.3 per cent to 33.5 cents at 2.20pm (AEST), against a 0.39 per cent dip in the broader market.
The firm’s stock has slumped more than 24 per cent since the start of this year while the benchmark S&P/ASX 200 has shed 1.6 per cent.
11 April 2016
Rayani Air service suspended
News reports state that Rayani Air has suspended operations since yesterday after the country's first Shariah compliant airline was launched just about three months ago last December.
Rayani Air founder Ravi Alagendrran said the decision was made following a strike by the airline's pilots yesterday and "technical" issues, which he did not elaborate on.
"We apologise to all our passengers. We will take this time to work out the operations and technical issues that have surfaced," Ravi said.
Ravi told staff in an email yesterday that operations were suspended with immediate effect until further notice as part of a company restructuring exercise.
"You may instruct your (subordinates) to close down the operations and re-count back the company assets," he said.
This would be the second restructuring exercise by the local company since it was founded on January 19, 2015, when Rayani Air changed its call sign from red to green and turned from a low cost carrier to a full service airline.
1 April 2016
GOL reports a US$324 Million loss for fourth quarter
News reports state that Gol Linhas Aereas Inteligentes SA reported a fourth-quarter loss and predicted that business will get worse this year amid declining demand and a shrinking Brazilian economy.
The net loss was 1.18 billion reais ($324 million), the airline said in a statement Tuesday after the close of trading in Sao Paulo. Fourth-quarter net revenue totaled 2.65 billion reais against analyst estimates of 2.66 billion reais. The company posted a record annual loss of 4.46 billion reais.
Brazil’s largest carrier by market share said the results reflect the nation’s economic condition and forecast that its takeoffs and total seats would both decline between 15 percent and 18 percent this year. Gol, like its peers, was hit by a 3.8 percent contraction in Brazil’s economy and 33 percent drop in the country’s currency against the U.S. dollar last year. Airlines have been particularly hurt by weak demand among business travelers, who typically generate the most-profitable fares.
26 March 2016
Fly Salone ceases flying
News reports state that After just 100 days of flying, the bottom of the Fly Salone Airline has fallen off, and the company has been grounded for good, as it seriously failed to meet its financial obligations to creditors, including the Icelandic company from whom they had leased the plane.
Fly Salone was an enterprise established by two well connected middle-eastern businessmen who are believed to have been granted Sierra Leonean passports and citizenship – messrs Jihad Saleh and Sam H. Sabrah.
And how much they paid for their Sierra Leonean passport and citizenship is another question for another day.
But as most credible financial analysts would agree, this was an enterprise that was doomed to fail, if the company registration document filed with the British Company House by both men, is anything to go by.
It seems from records that the airline had little or no investment and working capital, to have been granted approval by the Koroma government to register in the country and use the nation’s most precious asset – its national flag.
10 March 2016
SAS posts a net loss of $29 million
News reports state that Scandinavian airline SAS on Tuesday reported a first quarter net loss of 246 million kronor (29 million dollars), but said it more than halved its losses compared to a year ago.
Cost-cutting measures and lower fuel costs helped stem the flow of red ink. A year ago, the net loss totalled 640 million kronor.
Revenue in the November 2015 to January 2016 period was 8.27 billion kronor, down from 8.3 billion kronor a year ago. The first quarter is traditionally its weakest.
"Competition intensified in 2016 with increased capacity growth in the market," chief executive Richard Gustafson said in a comment.
The airline - whose main owners are the governments of Denmark, Norway and Sweden - is facing stiff competition from low-cost carriers such as Norwegian Air Shuttle.
10 March 2016
LATAM posts a $219 Million loss
News reports state that regional carrier LATAM Airlines posted a net loss of $219.2 million for all of 2015, saying the sharp depreciation of Brazil's real currency hurt its bottom line.
Chile-headquartered LATAM Airlines said on Tuesday that for the fourth quarter it saw a net loss of $16.3 million and that it was reducing its 2016-2018 fleet commitment by $2.9 billion.
8 March 2016
FastJet shares plunge
News reports state that Fastjet, the African budget airline backed by Sir Stelios Haji-Ioannou, said it may need to raise funds this year after low demand for flights forced it to issue a second profit warning in less than three months.
The company’s shares plunged more than 40% taking their fall in the past year to more than 70%.
Difficult market conditions in the African airline industry have lasted longer than management expected, Fastjet said in a trading update. Results this year will be worse than expected and the company does not expect to generate any cash in 2016.
Fastjet said it had more than $20m (£14m) of cash available at the end of February and that it had enough to meet operational requirements. But the company said it might seek to raise further funds later in the year.
26 February 2016
Republic Airways files for bankruptcy protection
News reports state that regional carrier Republic Airways Holdings Inc filed for Chapter 11 bankruptcy protection on Thursday, blaming several quarters of falling revenue after having to ground aircraft amid a pilot shortage.
The Indianapolis-based short-haul carrier, which feeds flights to American Airlines Group Inc, Delta Air Lines Inc and United Continental Holdings Inc brands, listed assets of $3.6 billion and $3.0 billion of liabilities, court documents showed.
Republic said the bankruptcy process would allow it to continue normal business while restructuring its finances and contracts.
"We worked hard to avoid this step," Republic Chairman Bryan Bedford said in a statement but added that the restructuring would "restore our airline and take it to new heights."
Republic offers approximately 1,000 daily flights to more than 100 cities in the United States, Canada, the Caribbean, and the Bahamas.
It is among of handful of regional airlines that have filed for bankruptcy since American Airlines filed in 2011.
United said in a statement on Thursday that it does not expect to change its flight schedules because of the bankruptcy. American said it is too early to assess an impact on scheduling, and Delta did not immediately return a request for comment.
** cover is excluded for airlines filing for insolvency protection for tickets or policies issued from 26th February 2016 unless otherwise agreed by IPP.
24 February 2016
Rex Airlines first ever loss at $11.4 million
News reports state that The Regional Express (Rex) Group has posted a statutory after tax loss of $11.4 million after writing down more than $17 million in assets, goodwill and fuel hedging.
It’s the first time the Australian-based business has posted a loss since its launch in 2002 in the wake of the Ansett collapse.
The business, which runs 50 Saab 340 turboprops to 58 destinations across Australia, posted a $3.3 million operating profit on a turnover of $132.6 million, down $600,000 on the same time the previous year. Half-yearly statutory profit after tax 12 months ago was $3.9 million.
The loss came with a $6.6 million goodwill impairment, a $6.8 million asset impairment and $4.7 million on fuel hedging.
The writedowns end a golden period for the business, which just 18 months ago, was Australia’s most profitable passenger airline group for the third consecutive year. While bigger rivals Qantas and Virgin Australia struggled with mounting losses and cost cutting, executive chairman Lim Kim Hai bragged in 2014 that Rex had “accumulated more PBT than Qantas or Virgin Australia over the last nine years”.
15 February 2016
City Airways grounded
News reports state that A City Airways flight to Hong Kong with more than 100 passengers was grounded at Don Mueang airport on Saturday after the airline became the third to face suspension this year.
The Civil Aviation Authority of Thailand said fresh doubts were cast over City Airways' safety standards and the airline missed a key deadline on Friday.
CAAT chief Chula Sukmanop told the Bangkok Post Sunday his agency found City Airways unsafe to fly and ordered the 8am flight E8-326 to Hong Kong grounded until the problem was rectified.
The flight suspension left 160 Chinese passengers stranded.
Mr Chula said the airline was responsible for taking care of the stranded passengers and finding alternative flights for them.
He said the Hong Kong aviation authority also raised a red flag on the airline's airworthiness in five areas. Two of the faults have to do with a co-pilot working without taking the mandated minimum break and the airline employing some untrained flight attendants.
The CAAT informed City Airways in advance that it would be allowed to operate only until Feb 12, unless the problems were solved. Regular City Airways' flights from Phuket to Hong Kong were also suspended yesterday on similar grounds.
City Airways management appealed to the CAAT for leniency, saying it had about 2,000 passengers booked for travel.
"But this is strictly a matter of aviation safety and so I told them no," he said.
The CAAT ran checks and discovered the airline has unpaid debts to Aeronautical Radio of Thailand and aircraft leasing firms.
Mr Chula said the CAAT will consider the airline's finances and decide if it is fit to conduct business in the aviation industry.
An aviation source said City Airways has unsettled bills worth about US$1 million (36 million baht) with several aircraft leasing firms in the US. The airline operates a Boeing 737 aircraft on its Don Mueang-Hong Kong and Phuket-Hong Kong routes.
The source added the airline was also behind in paying its pilots' salaries. Aircraft maintenance standards were also questioned. The airline charges low-priced fares, attracting mostly Chinese tourists.
A source in the Transport Ministry said small private airlines, particularly charters, have been monitored closely as some of them are prone to liquidity crunches and financial insolvency with cases pending in court. Air safety is also a major problem.
** Under IPP's policies cover is excluded for this airline as of 15th February for all policies or tickets issued on or after this date.
9 February 2016
Asian Air services suspended
News reports state that The Civil Aviation Authority of Thailand (CAAT) has suspended the operations of Asian Air, a small Thai-owned, full-service airline, slightly over a week after it banned a company plane from leaving Thailand.
The airline, founded in 2011 with a current paid-up capital of 500 million baht, said the order took effect on Sunday as the company is seeking all possibilities "to resume its operations as soon as possible".
On Jan 27, the CAAT banned an Asian Air aircraft from leaving the navy-owned U-Tapao airport in Rayong province to pick up passengers in Macau before flying on to Palau, an island country in the western Pacific Ocean, after it received an order from the Central Bankruptcy Court to freeze the debt-laden airline's assets.
** Cover is excluded for this airline with immediate effect for all tickets and policies issued on or after 9th February 2016
5 February 2016
Seaport Airlines files for chapter 11 bankruptcy
News reports state that SeaPort Airlines announced today that it has filed a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Oregon.
After much consideration, the Board of Directors of the Oregon-based airline has determined that reorganization is the best path forward for SeaPort Airlines, allowing the company to achieve long-term viability while maintaining its ability to provide air service to customers and communities. The announcement comes after the airline took a number of necessary steps to reduce its route network as a result of a national pilot shortage. Normal, day-to-day operations will not be interrupted by the filing.
** under IPPs policies cover is excluded for airlines filing for chapter 11 for tickets or policies issued from 5th February
18 January 2016
Sol Airlines cancels operations and files for bankruptcy
News reports state that after canceling unexpectedly all flights, the company Sol Airlines confirmed that since last Friday "ceases its activities" because of the "economic infeasibility" of the company "as a result of the termination of the cooperation agreement that was signed with Aerolineas Argentinas ". That same Friday a meeting between the aeronautical unions and company managers in the Ministry of Labour with the aim of finding a solution for the more than 300 company employees agreed. In this regard, the airline said in a press release that "comply with all legal obligations to its staff and has already requested the relocation of passengers who had acquired the company services, aspects that are already planned and resolved."
2 December 2015
Skywise Grounded
News reports state that Airports Company South Africa has confirmed that Skywise Airline has been suspended from operating at ACSA Airports with effect from Wednesday.
This is due to unpaid airport charges for landing, take off, parking of aircrafts and related service fees.
The company only officially launched in February this year.
“The suspension shall be withdrawn as soon as Skywise Airline has made appropriate payments in accordance with the Airport Charges Regulations,” Acsa Spokesperson Colin Naidoo said.
The low-cost airline has been hampered by problems in recent months, with flights being cancelled in November, leading people to question its future.
In October, the airline reduced the number of its daily flights flights from eight to six, when flights were grounded over a payment dispute with the ACSA.
Despite its problems, Skywise co-chair Tabassum Qadir insisted at the time that it was business as usual at the company, with positive sales and plans to double its “fleet” of one Boeing 737 in December.
In a desperate move the airline has written an open letter to the state, saying “with R4 million in arrears with ACSA and R4 million with ATNS, the airline is already on Fly as You Pay.”
Following an initial grounding on 13 October, the airline said “an agreement had been reached to pay the arrears in installments. Despite making two of the agreed payments, the airline said an extension on its third payment due on 1 December had been refused.
“Two installments were duly paid. The third installment was due to be paid on 1 December for which an extension of 48 hours was requested and rejected.”
“More than 200 people work for Skywise and it is funded with personal funds without any government support or institutional loan. Any business takes 6-8 months to break even and we were close to that.”
“We got a notice at 17:00 Tuesday, 1 December to be shut down with immediate effect.”
Skywise said that with a country “choking unemployment levels at above 20%” it did not expect Government authorities to react in this manner.
“When Government is spending about R1 billion a day in infrastructure development it is logical that they protect businesses that will complement such efforts and speed up economic growth.”
“While the aviation industry is a catalyst to economic growth, in South Africa it is a world where a few people influence the decision making processes for their own benefits, and are responsible for the previous failure of 11 private airlines.
“People like us still take the challenge to reduce unemployment, grow the domestic aviation industry and the greater economy only to become a victim of financial stress when billions of rand is readily available to bail out the national carrier.
“More than R65 million personal funds has been invested in Skywise and 4 years of hard work have brought us so far to serve the needs of South African travellers and continue to offer them affordable air fares.
“For about 8 months we had made losses and we were now getting to a point where we can break even. With peak season ahead and more than 8 000 passengers having booked to fly with Skywise airline, they must be looking forward to have their holidays.
“Most of them have never flown before and now have a chance to fly on affordable rates because of Skywise airline.
In the letter Skywise hinted at the previous foreclosures of previous airlines such as 1Time and Nationwide , saying ” government authorities have shutdown yet another private airline, and closed the doors of aviation for new entrepreneurs. If Skywise fail there no entrepreneur will be brave enough to take the challenge to launch into this brutal industry!
“Will ours will be the 12th to fail?”
** With immediate effect cover is excluded for this airline in respect of all tickets or policies issued from 2nd December 2015
25 November 2015
Air Asia X posts eighth consecutive net loss
New reports state that Malaysian long-haul budget airline AirAsia X Bhd reported its eighths consecutive quarterly net loss today, mainly hurt by higher aircraft operating expenses and foreign exchange losses.
The carrier booked a loss of RM288.2 million for July-September, wider than the RM210.85 million of the same quarter a year earlier, a stock exchange filing showed.
19 November 2015
Sky Greece Bankrupt
News reports state that SkyGreece Airlines has gone bankrupt about two months after it halted operations that stranded hundreds of passengers, the court-appointed monitor said Wednesday.
Jeffrey Kerbel of Ernst & Young confirmed that the airline was bankrupt, after filing for creditor protection in September in a bid to restructure.
Details of decision will be provided "in due course," he wrote in an email.
■
SkyGreece files for creditor protection after halting operations
■
Canadian Transportation Agency urged to help SkyGreece passengers after airline stops flying
■
SkyGreece Airlines 'temporarily' halting operations
Lawyers for the Toronto-based company had initially said the court-supervised restructuring proceedings would ensure that, over the long term, "all stakeholders, including passengers, are treated equitably and receive fair compensation for their claims."
Passenger rights advocate Gabor Lukacs said the bankruptcy leaves a number of unanswered questions, including if Canada has adequate oversight over the airline's finances and how long the company continued to sell tickets while knowing it might fail.
SkyGreece was founded in 2012 and started operations in 2014 with one Boeing 767 plane.
It cancelled all of its flights in late August, saying it was due to technical issues and financial setbacks resulting from the Greek economic crisis, but didn't elaborate.
The airline described the move as a temporary and said at the time that operations were expected to resume soon.
* Cover is excluded with immediate effect for tickets and policies issued for this airline
16 November 2015
LATAM $113.3 million loss for quarter
News reports state that Regional carrier LATAM Airlines Group SA posted a worse-than-expected net loss and a sharp drop in revenues for the third quarter on the back of weak economic growth in South America and the depreciation of Brazil's real currency.
LATAM reported late on Thursday a net loss of $113.3 million for the quarter. That compares to a loss of $107.8 million in the same period 2014 and analysts' forecasts for a $99.1 million loss.
"As a result of the complex macroeconomic situation in South America and the significant devaluations of Latin American currencies during the period, especially the 55.5 percent depreciation of the Brazilian real," total revenues in the third quarter fell 20 percent to $2.5 billion, said the carrier.
9 November 2015
Minoan Air suspsends operations
News reports state that Minoan Air based in Heraklion in Greece, has suspended operations but hopefully this is only temporary with its fleet of four four Fokker 50s aircraft which had operated scheduled services between Athens, Heraklion, Alexandroupolis, Rhodes, Thessaloniki, Kos, Mytilene, Mykonos, and Santorini grounded for the timebeing pending a corporate reorganisation.
* Under IPP policies cover is excluded for this airline for all policies and air tickets issued on or after 9th November 2015.
9 November 2015
Intersky files for bankruptcy
According to Intersky's website "Stop of air traffic
Sale of tickets and air traffic stopped in an instant.
Unfortunately we have to inform you that the intense negotiations with a potential investor didn’t result in a positive outcome. On Monday, 09th November 2015, InterSky will apply for insolvency. As a result, the ticket sale has been stopped and aircrafts remain on the ground.
Any claims of passengers with booked InterSky-tickets can make an application to the Landesgericht Feldkirch (federal court) as by Monday, 09th November 2015 with the certain reference number. InterSky will announce and communicate the reference number on Monday, 09th November 2015.
We truly regret the inconveniences and kindly ask for your understanding!
InterSky Luftfahrt GmbH"
* Cover is excluded under IPP's policies for tickets of policies issued from 9th November 2015
9 November 2015
Estonia Air files for Bankruptcy
News reports state that Estonia’s flagship airline announced on Saturday its bankruptcy after the European Union (EU) ruled it would have to pay back €85m plus interest of state aid pumped into the struggling business to keep it flying.
But, the authorities in Tallinn moved to absorb the shock by immediately setting up a new carrier to take over key routes.
"Estonian Air will cease operations from November 8," the company’s webpage said on Saturday. The carrier promised that passengers with tickets would be offered replacement flights with other airlines, or that they could claim a refund payable next month.
The announcement came after the European Commission ordered earlier on Saturday the state-controlled airline to pay back the millions it had received in aid.
"The European Commission has concluded that aid measures by Estonia in favour of national flag carrier Estonian Air gave the company an undue advantage over its competitors in breach of EU state-aid rules," the EU’s executive branch said.
"Estonian Air, therefore, needs to pay back the state aid already received, which according to the commission’s information amounts to about €85m plus interest, and cannot receive an additional €40m of restructuring aid," it said. The Baltic country’s flagship carrier had been struggling financially since 2006, the commission said, saying the company should not continue to rely on public money to survive.
"It would not be a good use of taxpayer money to keep Estonian Air in the market artificially — nor would it be fair to competitors, which have to compete without such support," said commissioner Margrethe Vestager, in charge of competition policy.
* Cover under IPP's policies is excluded for all policies or tickets issued from 9th November 2015
29 October 2015
Fly Africa grounded
News reports state that Fly Africa's operations have been suspended after the airline surrendered its operating licence due shareholding disputes and failure to meet statutory requirements.
The low cost airline's planes have been grounded after the Civil Aviation Authority of Zimbabwe (CAAZ) suspended the airline’s operations.
Earlier this week, the airline surrendered its operating licence citing operational challenges. Close sources say the decision to surrender the operating licence is a result of boardroom squabbles and shareholding disputes.
The airline has local and foreign shareholders. Apart from the internal disputes, the airline has not been remitting passenger services charges to CAAZ.
Information gathered also reveals the airline aircraft were not based in Zimbabwe while the company did not have an accounting manager in violation of Statutory Instrument 140.2010.
Transport and Infrastructural Development Minister Dr Joram Gumbo confirmed the development, adding that after surrendering the operating licence and failure to meet the regulatory requirements the airline’s operations had to be suspended.
"After surrendering the licence and failure to meet the regulatory requirements, the airline’s operations have been suspended," said Dr Gumbo.
The budget airline’s board chairperson Professor Chakanyuka Karase could not be reached for comment.
There was drama at the Harare International Airport on Tuesday when passengers had to be asked to disembark from the plane.
Despite surrendering its licence, the airline had booked passengers, prompting CAAZ to intervene for the safety of the passengers and to enforce the law.
The airline was licensed by CAAZ in August 2014 and introduced its first aircraft in the same month to service the Victoria Falls-Johannesburg route.
* cover under all IPP policies is excluded for this airline with immediate effect for all policies and tickets issued from 29th October 2015
2 October 2015
Transaero files for Bankruptcy
News reports state that Russian Prime Minister Dmitry Medvedev has given the green light to begin bankruptcy proceedings for Transaero airlines, according to sources cited by online newspaper Gazeta.ru. Negotiations on a takeover of Russia's second-biggest carrier by Aeroflot have been deadlocked. According to sources, Aeroflot took a hard line refusing the Transaero consolidation.
16 August 2015
Korean Air swings to a loss
News reports state that Korean Air Lines Co. swung to a loss in the second quarter, hurt by the outbreak of Middle East respiratory syndrome in South Korea in late May that triggered large-scale trip cancellations by Chinese and Japanese tourists.
The country’s largest airline by revenue reported Thursday a 169.2 billion won ($144 million) net loss for the April-June period, compared with a 361.8 billion won profit in the year-earlier period.
The results were worse than the market had expected.
Analysts polled by The Wall Street Journal forecast earlier this week that the carrier would post a second-quarter net loss of 75.1 billion won, but expected an operating profit of 74.5 billion won.
“MERS has had a greater-than-expected impact, scaring off tourists during the traditionally off-season,” Korean Air said in a statement.
The Korean flag carrier said the bottom line was also hurt by a weaker Korean currency inflating the value of its foreign debt and interest payments.
Revenue declined 3.8% on year to 2.79 trillion won from 2.90 trillion won.
The country’s two biggest airlines—Korean Air and Asiana Airlines Inc.--suffered a deep decline in inbound passenger traffic, forcing them to suspend or cut back flight schedules on important routes.
Korea’s MERS outbreak was the largest outside Saudi Arabia, with 186 infections and 36 deaths, prompting thousands of tourists to cancel visits to the country. No new MERS cases have been reported since early July.
Korean Air said Thursday it has resumed normal operations on all routes to China and Japan.
More than two-fifths of South Korea-bound travelers last year were Chinese, and their numbers have swelled at a compounded annual growth rate of 40% over the past three years, according to Credit Suisse.
Analysts said a weaker Chinese currency may also affect the carrier’s sales, but any negative impact will be short-lived.
“Tourists usually don’t scrap their overseas travel plans just because of foreign-exchange fluctuations. The yuan effect will be limited,” said Shinhan Investment Corp. analyst Park Gwang-rae.
China’s surprise devaluation of the yuan for the third time in a row this week has raised concerns among investors that the Chinese tourist boom may be hurt by their weakened purchasing power.
16 August 2015
LATAM group losses widen
News reports state that Latin America’s largest airlines tumbled this week after carriers reported disappointing earnings that were hurt by lower demand and weaker currencies.
Latam Airlines SA, which reported a wider-than-expected loss Thursday, is down 10 percent this week to a nine-year-low. Colombia’s Avianca Holdings SA has plunged 15 percent to a record low, Panama City-based Copa Holdings SA lost 19 percent, and Brazil’s Gol Linhas Aereas Inteligentes SA is also down for the week after losing as much as 3.9 percent Friday.
An index of Latin American airline stocks reached a six-year low Friday, a day after a gauge of the region’s currencies fell to a record. Weaker currencies are making travel more expensive for Latin Americans amid a regional economic slowdown and offsetting the benefits the airlines would have normally seen from the bear market in oil.
“Massive depreciation of currencies and economic slowdown in the region is affecting demand,” said Daniel Guardiola, an analyst at Larrain Vial. “Most airlines increased their guidance at the end of 2014 with the fall in the price of oil. They didn’t foresee other risks that could affect the region.”
Citing “challenging macroeconomic conditions,” Latam cut its operating-margin guidance this year and said it may postpone delivery of some planes. Copa also slashed guidance on Aug. 12 after its quarterly results reflected weak demand. Gol CEO Paulo Kakinoff said in a call Friday it was the most adverse scenario he’s ever seen in Brazil. Avianca will report earnings next week.
14 August 2015
Air Berlin losses widen
News reports state that German airline Air Berlin said it expected yield, load factors and sales to improve in the second half of the year after it reported a wider second-quarter loss on Wednesday.
The airline, 29 percent owned by Abu Dhabi-based Etihad, has made operating losses in four of the last five years and changed its chief executive four times in the last three years as it seeks to stem losses and reduce debt.
It reported a second-quarter loss before interest and taxes (EBIT) of 15.9 million euros ($17.8 million), against a loss of 6.9 million one year previously as the strong U.S. dollar and fuel hedging contracts eroded the benefits of cheaper jet fuel.
13 August 2015
Asiana Airlines losses widen
News reports state that Asiana Airlines Inc., South Korea's second-largest flag carrier, said Tuesday that its loss sharply widened in the second quarter from a year earlier, hit by a fall in travelers amid fears over the outbreak of Middle East Respiratory Syndrome (MERS).
Net loss came to 85.4 billion won (US$72.4 million) during the April-June period, compared with the previous year's loss of 11.8 billion won, the company said in a regulatory filing.
Sales dropped from 1.4 trillion won to 1.3 trillion won over the cited period, while the company posted an operating loss of 61.4 billion won, a turnaround from an operating income of 3 billion won, the company added.
"The passenger business in the second quarter was much affected by MERS, which was first confirmed in May. That caused a spike in the number of cancellations of trips by Chinese and Japanese tourists," the company said.
Sales in the passenger sector shrank 7.7 percent on-year in the second quarter, while those of cargo shipments dropped 13.5 percent over the same period due in part to a slump in routes bound for Europe.
During the first half, the company posted a net loss of 25.8 billion won, widening from the previous year's loss of 58.3 billion won. It logged 2.7 trillion won and 15.6 billion won in sales and operating profit, respectively, in the same period.
Shares of Asiana Airlines closed down 4.19 percent at 6,400 won on Seoul bourse, and the second-quarter results were released after the market closed.
6 August 2015
Virgin Australia cuts routes as losses mount
News reports state that Virgin Australia will withdraw from a number of routes from Australia to Bali and Thailand and replace services with its budget offshoot Tigerair in a bid to stem bleeding from its international operations whose losses widened to $69 million for the year.
In a major shake up of its short-haul international network, Virgin will stop flying from Adelaide, Melbourne and Perth to Bali from March, and instead use Tigerair on those routes, after deciding it is better suited to a no-frills carrier.
It puts Tigerair directly up against Qantas' budget offshoot, Jetstar, and AirAsia on the routes to the popular Indonesian tourist destination. Jetstar has the largest market share on Australia-Bail routes, on which it flies new 787 Dreamliner aircraft.
Virgin will also ditch flying from Perth to Phuket from February because it said the market was "just not big enough" to make it viable. Unlike Bali, Virgin will not replace its services with Tigerair.
4 August 2015
Kenya Airways massive losses, may need bail out
News reports state that Kenya Airways, which reported a record loss in its year ended March, may require a $500-600 million bailout, the Kenyan finance minister said on Tuesday.
Henry Rotich told Reuters the final figures and the form of recapitalisation would depend on a turnaround plan being prepared by Mckinsey and Seabury consultants, who were hired by the airline part-owned by AirFrance-KLM.
31 July 2015
Syphax Airlines grounded
News reports state that Tunisia's private carrier Syphax said it is grounding all its flights temporarily from midnight Thursday, with a company lawyer citing "financial difficulties".
"It is a temporary suspension of flights... until solutions are found," said Samia Maktouf.
In a terse statement Syphax said flights in to and out of Tunisia would be grounded from midnight, without giving a reason for the decision.
The announcement comes a day after the International Air Transport Association (IATA) said it was suspending all activity with Syphax, according to Maktouf.
Tunisian media said IATA, the world's largest airline association, has instructed its partners, including travel agencies, to cease dealing with Syphax, saying the carrier had failed to meet its financial obligations.
Syphax was founded by businessman Mohamed Frikha following the 2011 uprising that toppled president Zine Ben Abidine Ben Ali.
Tunisia has struggled to rebuild its economy since the uprising, namely its tourism industry.
* Under all IPP policies cover is excluded with immediate effect for policies and tickets issued from 31st July 2015
30 July 2015
Aer Lingus posts first half year losses
News reports state that Aer Lingus has posted first-half year losses of €13.9million (£9.8m) amid the airline's ongoing sell-off to IAG.
The figure is an increase from losses of €9.9m (£7m) during the same period a year previously "before net exceptional items".
But the carrier turned a profit of €34.5m (£24.4m) for the second quarter of the year as the much-anticipated takeover by Willie Walsh's IAG neared.
The Dublin-based carrier revealed a drop in profits of about 11% from the same period last year as fluctuations in foreign exchange rates - mainly in the US dollar and euro - and high fuel prices hit the business.
But overall revenue at the airline grew by 7% to €468.9m for the second quarter of 2015.
The report came at the same time as claims that the company could be set to free up some of its Belfast to Gatwick slots as part of a European Commission requirement amid the IAG takeover.
25 July 2015
Air France goes deeper into the red with losses
News reports state that Air France-KLM said on Friday it would add a further €300 million ($328.4 million) to a previously announced €1.5-billion cost-cutting programme as it revealed first-half losses of €619 million.
Despite a five-percent increase in passenger revenue for the first half of 2015, income from cargo plummeted 81 percent, the company said.
Tightening competition and the adverse effects of exchange rates also helped drag the airline farther into the red.
As a result, Air France-KLM chairman Alexandre de Juniac said the company would increase its two-year cost- cutting target to €1.8 billion by seeking greater efficiencies and additional closures of unprofitable routes.
"The lack of results improvement leads us to implement immediate additional adaptation measures including, in particular, the closure of heavily loss-making routes, the downward revision in capacity for the forthcoming winter season, together with an acceleration and an increase in the magnitude of our cost-saving initiatives," de Juniac said in a statement.
The airline -- Europe's largest in terms of traffic -- has been struggling to boost profitability and reduce its €5.4 billion of debt.
De Juniac has been urging unions to agree to a five-year "Perform 2020" plan to boost efficiency.
Fearful of job cuts and salary reductions, unions have resisted several points in the programme, especially expansion of its low-cost Transavia airline.
A 14-day strike in 2014 by pilots over planned restructuring around Transvia cost the airline 425 million euros, dragging it to a €198-million loss for the year.
In revealing the continued losses during the first half of 2015, de Juniac appealed to unions to join management to find a way of returning to profit.
1 June 2015
The new boss of Malaysia Airlines has claimed the carrier is "technically bankrupt"
News reports state that Christoph Mueller has confirmed that 6,000 jobs will be cut at the troubled airline - ahead of a rebrand in September which aims to repair the damage caused by the losses of MH370 and MH17.
Consumer confidence was badly affected when Flight MH370 disappeared with 239 people on board in March 2014, and just four months later, Flight MH17 was downed by a suspected ground-to-air missile over Ukraine - killing 298 people.
The tragedies led to Malaysia Airlines being taken into state ownership and delisted from the stock market, but analysts claim the company has been mismanaged for years - a sentiment echoed by Mr Mueller.
"The decline of performance started long before the tragic events of 2014," he said.
Stiff regional competition has led the company to post losses for several years - and in a statement, the airline pledged to "stop the bleeding" in its finances by the end of 2015, in the hope it will return to growth by 2017.
Mr Mueller, nicknamed The Terminator in Ireland for the job cuts he implemented at Aer Lingus, is expected to reduce the number of long-haul routes offered from Malaysia to Europe, and focus on regional services.
However, a "profitable" twice-daily service from London Heathrow to Kuala Lumpur is set to continue.
Under the new CEO's plans, Malaysia Airlines' workforce would shrink to 14,000.
The challenges facing the company come amid low jet fuel prices, which are expected to make this year one of the most profitable for the industry since the start of the century.
It is expected that the 12-month restructuring plan for Malaysian Airlines will cost £1.1bn - and last week, an administrator was appointed to oversee the transferral of the carrier's assets to a new company.
Mr Mueller said it was "business as usual" despite the disruption - and told passengers all reservations would be honoured, with scheduled flights going ahead as planned.
25 May 2015
Malaysian Airlines enters administration
News reports state that Malaysia Airlines has moved to reassure its customers it is operating as normal after a voluntary administrator was appointed today as part of a restructuring under its government owners.
Newly installed chief executive Christopher Mueller said operations would continue as normal under the administration and existing reservations would not be affected.
“This appointment does not affect our daily operations or existing reservations,’’ he said. “You can continue to make reservations in full confidence that our flights and schedules are operating as normal, that tickets sold will be honoured, and that our Enrich frequent flyer program continues with miles and status preserved.”
Mr Mueller’s statement came after Khazanah Nasional Berhad, the state-owned fund that last year took control of MAS, announced the appointment of administrator Mohammad Faiz Azmi to oversee the restructuring of the delisted airline.
The airline’s statement said the appointment reflected the restructuring taking place before the relaunch of the airline group in September under a new business model and a new management team led by Mr Mueller.
The appointment of the administrator comes under the Malaysian Airline System Berhad (MAB) (Administration) Act 2015 enacted by the Malaysian Government.
The MAS Act allows the administrator to facilitate the transfer of selected assets and liabilities to MAB, which will replace MAS as Malaysia’s new national carrier.
The airline was already in financial trouble when it was hit by the loss of two Boeing 777s last year.
23 May 2015
Air Lituanica ceases operations
News reports state that Air Lituanica, the Lithuanian airline founded here, ceased its operations on Friday due to financial difficulties.
"Airline management, acting responsibly and seeing risk not to fulfill commitments for the passengers, is stopping all regular flights and will make efforts so that travelers are affected as less as possible," the company said in a statement.
Air Lituanica cancelled all its flights as from Saturday. The company still operated flights to and from Amsterdam, Paris and Tallinn on Friday.
A solution for some passengers was found, the company noted.
"Air Lituanica agreed with AirBaltic that all passengers with Air Lituanica tickets for cancelled flights between May 22 and May 29 will be rebooked on AirBaltic flights to their origin destinations," it said in a statement.
AirBaltic is a Latvian airline operating in Latvia, Lithuania and Estonia.
"We will rescue the stranded passengers in the first days following the suspension of (Air Lituanica) flights and will offer special rescue fares for customers booked for flights later in the summer," Martin Gauss, AirBaltic's chief executive officer, was quoted as saying in a separate statement.
"Furthermore, today's event in Vilnius is a strong signal that the three Baltic countries should take a common approach to their aviation, to best support travellers, new economic activity, and new jobs," he added.
Air Lituanica stressed all passengers have guaranteed flights with the Latvian company for the next eight days.
However, it has yet to be determined who will carry passengers travelling after May 29. Air Lituanica promised to provide a solution to this by next Monday at the latest.
"If there will be no agreement (for rebooking with AirBaltic) all passengers are entitled for full refunds and guarantees by European law and the Montreal convention," Air Lituanica said.
Remigijus Simasius, mayor of Vilnius, said he learned Air Lituanica was close to bankruptcy one month ago when he came into office after mayoral elections earlier this spring.
"The company's financial liabilities exceeded its assets by more than three times, it is the main reason why no private investors agreed to get involved in joint activities," Simasius told reporters on Friday.
However, Rimantas Sinkevicius, Lithuania's transport minister, said the collapsing company could have been saved by an investor.
"We hoped that the company would manage to find investors, to cooperate with other Baltic countries and develop these activities," Sinkevicius was quoted as saying by BNS news agency.
"Unfortunately, the investor has not been found and the markets of the three Baltic countries have not been integrated," he added.
According to Simasius, the Lithuanian government refused to financially support the airline. Vilnius municipality, the main Air Lituanica stockholder, suffered about 10 million euro (about 11 million U.S. dollars) yearly loss due to the company's situation, the mayor said.
Simasius did not dismiss the possibility of an official investigation into the airline activities.
"The main thing is rather the beginning of the company, not the end; this is where we should look for the reasons why the company is dead today," he noted.
Air Lituanica was established in 2012 at the initiative of the then-Vilnius mayor Arturas Zuokas. It is the second Lithuanian air carrier to cease operations. Defunct privately-owned flyLAL-Lithuanian Airlines grounded all flights early in 2009 also due to financial troubles.
13 May 2015
Air Berlin Loss
News reports state that German airline Air Berlin Plc. (AIBEF.PK) reported that its net result for the first quarter of 2015 amounted to negative 210.1 million euros, compared to negative 209.8 million euros in the first quarter of 2014. Loss per share was 1.85 euros compared to loss per share of 1.80 euros last year.
The financial result in the first quarter of 2015 amounted to negative 52.3 million euros compared to negative 30.5 million euros in the previous year's first quarter.
Pre-tax loss narrowed to 212.2 million euros from 213.4 million euros in the same quarter of the previous year.
The operating result (EBIT) amounted to negative 159.9 million euros compared to negative 182.8 million euros in the prior year's quarter.
7 May 2015
Hawaiian Island Air large loss
News reports state that Island Air, the Hawaii interisland airline owned by billionaire Larry Ellison, lost nearly $12 million in the fourth quarter, or more than half of the $22 million it lost for all of 2014, according to data released Monday by the Bureau of Transportation Statistics.
The interisland carrier reported operating revenue of $7.9 million in operating revenue in the fourth quarter.
The $11.8 million loss in the fourth quarter was its seventh consecutive quarter of losses and more than double the $4.9 million it lost in the same quarter in 2013. For the entire year, the company lost $21.78 million in 2014, compared to a loss of $3 million in 2013.
Last week, Island Air said that it would cut its workforce by 20 percent, close its operations on Kauai and cancel delivery of new aircraft in the short term as it repositioned itself.
2 May 2015
Virgin Australia reports loss
News reports state that Virgin Australia has posted a narrower loss during the March quarter as costs fell, passenger yields improved and budget subsidiary Tigerair recovered to turn a small profit.
The airline suffered an underlying loss before tax of $22 million in the three months to March 31, compared with an $83 million loss during the same period in 2014.
It made a statutory loss after tax of $28 million, compared with $103 million previously.
Tigerair also made a small underlying profit before tax of $500,000, compared with a loss of $25 million in 2014.
24 April 2015
Air Arik grounded
News reports state that following the N1.2 billion debt owed the Federal Airports Authority of Nigeria (FAAN) by Arik Air, the Association of Air Transport Association of Nigeria (ATTSAN) and the National Union of Air Transport Employers (NUATE), on Thursday grounded the airline’s scheduled flight operations from the Nnamdi Azikiwe International Airport (NAIA), Abuja, to other parts of the country.
As at the time of filing this report, the airline’s 13 scheduled flights to different parts of the country were automatically cancelled with hundreds of passengers going through excruciating time trying to take alternative airlines to their destinations.
While speaking on the phone from Lagos, FAAN’s Managing Director, Mr. Saleh Dunima, said efforts were however being made in Abuja with the two unions to resolve the crisis.
He said: “Right now, Arik is discussing with the management of Abuja airport, as soon as they sort that out, they will resume flight operations.”
Asked to speak on the profile of the indebtedness, he refused to make its disclosure, explaining that the amount being owed is not supposed to be in public domain.
Speaking on anonymity, an authority hinted that the Arik air had also failed to remit the passengers service charge of N1,000, the amount which is due to FAAN also runs into millions.
The source disclosed that what Arik is owing FAAN from landing and parking fees is N1.2 billion, which is separate from the PSC.
He said Arik could only be allowed to commence flight operations if they can pay a substantial percentage of the amount before the close of work yesterday.
The source said the allocation of slots seven and eighth to Arik which covers operations within the 22 airports would have been an added advantage to the airline, adding that some local airline operators do not have such advantage of flying the 22 airports.
1 April 2015
GOL net loss $248 Million
News reports state that GOL Linhas Aereas Inteligentes S.A. reported fourth-quarter 2014 net loss approximately $248 million, much wider than the year-ago loss of $8.4 million. Net loss in 2014 was approximately $474 million, much wider than the year-ago figure. A decline in domestic supply hurt the 2014 results.
26 March 2015
TAP $50 million loss
News reports state that Portugal's flag carrier TAP swung to a 2014 loss of 46 million euros ($50 million), after a profit the previous year, due to delays with the delivery of new aircraft and strikes against the planned privatisation of the state-owned airline.
Still, TAP said in a statement passenger numbers rose nearly 7 percent to 11.4 million. Plane occupancy rate also rose to 80.6 percent from 79.5 percent a year earlier.
Various strikes at TAP, called against the privatisation because of fears it will lead to job losses, along with operating problems with its fleet and other factors cost the airline 108 million euros.
In January, after talks with the unions and threats of more crippling strikes, the government said any buyer or buyers of TAP would be barred from laying off workers en masse as long as the state remains a shareholder.
The government plans to sell its 66 percent controlling stake in TAP, but will retain a 34 percent holding that could be sold two years after the privatisation.
TAP has debts of some 1 billion euros and the cash-strapped state is banned from injecting capital into the company under European Union rules.
9 March 2015
SAS losses widen
News reports state that Scandinavian Airline SAS (SAS.SK) on Thursday reported a widening net loss for its fiscal first quarter as costs increased due to reduced capacity.
The airline said net loss for the three months ended Jan. 31 was 640 million Swedish kronor ($77 million), compared with a loss of SEK112 million for the same period last year.
SAS said that the potential exists for it to post positive earnings before tax and nonrecurring items in the 2014/2015 fiscal year.
Sales during the period notched SEK8.37 billion, up from SEK7.87 billion last year, while operating loss was SEK657 million, compared with an operating profit of SEK1.17 billion in the year ago period.
Shares closed at SEK18.30 Wednesday.
1 March 2015
Thai Airways losses bigger than expected, share slide
News reports state that Thai Airways International PCL posted a wider-than-expected fourth-quarter loss as a drop in passenger numbers after months of domestic political unrest hurt the national carrier, pushing its shares down to a nine-month low.
The performance raised concerns on whether the carrier can turn around quickly while it battles fierce competition and soaring debt, brought about by high operating costs and aircraft purchases in recent years.
The airline is one of Thailand's major state companies undergoing reform since the military seized power in May. It is expected to post further losses this year due to higher costs from restructuring, which involves cutting operating costs and capacity by 20 percent, selling aircraft and job cuts.
"Thai Air's business restructuring is unlikely to bear fruit in the near term and we see execution risk given the firm's inflexible cost structure and numerous stakeholder groups," Suppata Srisuk of Bualuang Securities said in a note.
Thai Airways, 51 percent owned by the finance ministry, has total debt of $5.9 billion, the highest among Southeast Asian airlines and ranking number 9 among 47 airlines in Asia Pacific, according to Thomson Reuters data.
The airline posted a net loss of 6.4 billion baht ($196 million) for October-December, compared with a net loss of 5.7 billion baht in the same period a year earlier. Six analysts surveyed by Reuters had forecast an average 2.6 billion baht net loss.
A foreign exchange gain of 3.2 billion baht in the quarter was wiped out by loss from jet fuel hedging, an airline official told Reuters.
26 February 2015
Aer Lingus suffers a €180.3 million loss
News reports state that Aer Lingus suffered a pre-tax loss on the back of its €190m payment to settle the dispute over the underfunded Irish Airlines Superannuation Scheme (IASS).
The Irish flag carrier suffered a pre-tax loss of €180.3m, but would have seen a profit of €72m had it not been for a number of one-off costs, including the €190.7m payment to launch a new defined contribution (DC) plan.
The plan will offer benefits to members of the IASS that have seen their future IASS payments reduced as part of the proposal to tackle the more than €700m deficit, which the company was barred from solving through additional contributions.
The airline’s preliminary results for 2014 showed that the Pensions Authority had signed off on the IASS funding proposal in late December, with the €190m immediately placed in an escrow account.
“Aer Lingus Limited has also been involved in a separate set of discussions concerning the Pilots Scheme, a single employer scheme for Aer Lingus pilots,” the report added.
It noted that, following negotiations with the pilots’ union, a funding proposal for their scheme had been submitted to the regulator in early December.
The company also disclosed professional and legal fees of €6.4m in 2014, which it said “principally” related to settlement talks relating to the IASS.
Aer Lingus currently faces a lawsuit from the pensioners of the IASS, with a group representing pensioner interests’ threatening a High Court case worth €170m over the benefit cuts suffered by retired workers.
21 February 2015
Lufthansa shares plunge
News reports state that BERLIN, Feb 20 (Reuters) - Germany's Lufthansa said it will not pay a dividend for 2014, conserving cash for restructuring, after its net result was hit by the sale of an IT unit, an increase in pension liabilities and losses from fuel-hedging activities.
Lufthansa is trying to cut costs to better compete with low-cost carriers and rivals from the Middle East. Its efforts have met fierce resistance from pilots, who went on strike 10 times last year and have already held one walkout this year.
Lufthansa shares were down 4.5 percent at 1606 GMT on Friday, by far the biggest decliners in a 0.3 percent-weaker blue-chip German DAX.
Some analysts had already said Lufthansa might not pay a dividend for 2014, but the average forecast was still for a 2014 payout of 0.38 euros per share, according to ThomsonReuters data, against 0.45 euros for the 2013 business year.
Shareholder Union Investment welcomed the dividend cut.
"Lufthansa desperately needs every cent for restructuring and to pay for renewal of their fleet," portfolio manager Michael Gierse told Reuters.
19 February 2015
Air France shares drop as strikes hit
News reports state that Air France KLM shares have fallen as much as six per cent in early trading to 713 cents per share on the .
The owner of Air France and KLM airlines said group revenue fell 2.4 per cent to €24.91bn (£18.4bn) during 2014, despite a 1.3 per cent rise in passenger numbers for the full year.
Earnings before interest, tax, depreciation and amortisation fell to €1.59bn with the effects of a 14-day pilots' strike.
The Franco-Dutch group will cut investments by €600m over the next two years - including cutting the equivalent of another 800 jobs through voluntary measures.
It also plans to reduce debt, which increased by €51m to €5.4bn in 2014, to €5bn by the end of 2015, more than the €4.5bn previously planned.
2014 was a tough year for the European carrier, after it slashed profit forecasts three times. It also took a hit from a 14-day pilots' strike, which cost the airline €425m.
In the ever-turbulent airline industry, which has previously blamed over-capacity for denting profits, the outlook is still challenging in Europe which isn't much helped by worries over the Eurozone economy.
There's pressure from increasing competition from low-cost carriers and Asian and Middle Eastern airlines expanding into the region.
It is also in the midst of a five-year plan to reduce costs in its French business and expand its low-cost carrier Transavia.
9 February 2015
EuroLot to liquidate
News reports state that the airline is to liquidate. The move had been expected. ''For two months we analyzed various options concerning Eurolot's activities,'' commented Adam Ambrozik, head of a restructuring department at the Treasury Ministry. ''We have taken responsible decisions regarding the ownership,'' he added. Ambrozik argues that there is no forseeable way of making the airline profitable. The treasury had a 62.1 percent stake in the airline.
28 January 2015
Skymark Airlines files for bankruptcy
News reports state Japan's Skymark Airlines filed for bankruptcy protection on Wednesday (Jan 28), as the struggling carrier faces potentially massive penalties over a cancelled US$2.2 billion jet order with Airbus.
The filing came less than a month after Japan's third-biggest airline said the European aircraft maker was planning to sue it over the collapsed deal.
"The company came to the conclusion that it will be extremely difficult to rehabilitate itself on its own," the airline said in a statement released late on Wednesday. Skymark said company executives have held an emergency board meeting and filed for bankruptcy protection with the Tokyo District Court.
President Shinichi Nishikubo - who rejected an Airbus call to merge with a larger rival after their dispute was made public in July - also resigned on Wednesday, the carrier said in a separate statement. The airline will continue operating for the time being, it added.
Skymark said it now has debts topping US$603 million and faces possible compensation costs of as much as US$700 million linked to the axed Airbus deal. The airline is in talks with Airbus to reduce the size of the penalty, after accusing Airbus of threatening it with "overpriced" costs.
Earlier this month, Japan's Asahi newspaper said talks about rival All Nippon Airways (ANA) investing in Skymark had fallen apart, and that the loss-making carrier would try to climb out of the red on its own. Skymark rejected that report but said it was talking with ANA and Japan Airlines about code-sharing, as well as with domestic and overseas funds over a possible investment deal.
The carrier has struggled because of fierce competition in the airline sector, and its woes deepened after the Airbus affair made headlines last summer. Skymark's Tokyo-listed shares lost about half their value after Airbus cancelled the order for six A380 jets, signed in 2011, apparently over concerns it would not get paid.
Following the bankruptcy filing, Tokyo Stock Exchange announced it would delist the airline from Mar 1.
14 January 2015
Hamburg Airlines files for insolvency
News reports state that The German Civil Aviation Authority (LBA) suspended the air operator’s certificate (AOC) for Hamburg Airways shortly before Christmas, several German media outlets have reported. The carrier’s last flight was operated from Moscow to Hanover on Dec. 19.
Hamburg Airways could not immediately be reached for comment. The airline’s website is still online.
Privately owned Hamburg Airways was founded in December 2010 and started flights in March 2011. It was the successor of Hamburg International, which declared insolvency in October 2010.
9 January 2015
Cyprus Airways to liquidate
New reports state that NICOSIA, Cyprus Cyprus' national airline lost its operating license and stopped all flights after the European Union ruled that it had illegally received tens of millions of euros in state aid, officials said Friday.
Finance Minister Harris Georgiades and Communications Minister Marios Demetriades said that an administrator will now be tasked with winding down Cyprus Airways. The country's air transport licensing authority said it revoked the airline's license because it could not ensure flight safety as a result of its financial troubles.
The European Commission ruled that money-losing Cyprus Airways, which is nearly 94 percent government-owned, must pay back over 65 million euros ($76.78 million) out of a 103 million euro ($121.67 million) state aid package it received in 2012-13 that gave it an unfair advantage over competitors.
The ministers said the government will cover the estimated cost of 6-7 million euros of Cyprus Airways ticket holders who either wish to be reimbursed or make alternative travel arrangements.
Demetriades said some 70 airlines fly to Cyprus, which received a multibillion euro international rescue nearly two years ago, and that the demise of the national carrier — whose market share dwindled to a mere 10 percent — won't diminish the east Mediterranean island's air links abroad.
He said plans are under way to set up a new company with private backing that will bear the Cyprus Airways name and logo.
Several dozen airline staff milled outside the company's Nicosia offices awaiting word of what will happen to them as Georgiades said they will receive salaries and pension benefits that they're entitled to.
Georgiades said the airline's financial troubles were so severe that potential investors couldn't be wooed. Early investment feelers sent out by companies including Ireland's Ryanair and Greece's Aegean went nowhere.
The company, founded in 1947, struggled due to years of graft and mismanagement, and hemorrhaged money as it could no longer compete with new low-cost airlines that grabbed huge chunks of its business.
Authorities tried to salvage the bloated airline through several restructuring plans that halved staff to around 500 people and shrunk the fleet to six planes. But the last straw came by way of the European Commission's ruling.
* under IPP's policies, cover is excluded going forward from today for Cyprus Airlines.
5 January 2015
TigerAir Mandala files for bankruptcy
News reports state that Budget carrier PT Mandala Airlines has filed for bankruptcy at the Central Jakarta Commercial Court, as it is no longer able to operate or pay its debts.
The company decided to file the case on Dec. 9 in a bid to rescue the interests of shareholders and creditors, to whom it owed Rp 1.5 trillion (US$120.45 million) and Rp 7 billion, respectively, Mandala Airlines lawyer Zaky Tandjung said on Monday.
“This act is to show that we have good faith,” he said as quoted by kontan.co.id. However, Zaky declined to explain why the total amount of its debts was lower than the Rp 2.4 trillion detailed in the 2011 debt postponement petition (PKPU).
5 January 2015
SkyTrans closes operations
News reports state that Cairns-based regional airline Skytrans has announced it has ceased operations after 25 years.
The family owned company has been steadily declining for more than 12 months after the loss of Queensland Government contracts and higher operating costs due to a weakening Australian dollar.
Managing director Simon Wild said in a statement it was a sad day for the business, its staff and the passengers and communities of north Queensland.
Mr Wild said the company made its own decision to close due to an uncertain future.
He said Skytrans ceased trading on Friday to ensure it could maximise its cash reserves for staff redundancies, suppliers and passenger refunds.
"For exactly 25 years and one day, Skytrans has had the privilege to serve regional Queensland from its home base in Cairns," he said.
4 January 2015
Gambia Bird closes operations
News reports state that Gambia Bird Airlines has suspended commercial flight operations until further notice.
A statement from the airline said: “We wish to express our sincere regrets for disrupting the travel plans of those of our esteemed guests who are booked on the suspended flights.”
It explained: “We further wish to confirm that we will provide a full refund of all tickets purchased prior to today’s flight suspension.”
Gambia Bird Airlines said it would comply with all obligations and that it will provide all necessary support services to passengers affected by the flight suspension.
All passengers holding a valid ticket are kindly asked to contact their respective travel agency for further advice and information or to get in touch with Gambia Bird Airlines’ Customer Relations at crm@gambiabird.com or call:
Banjul +220 690 0909
Accra +233 303 93 46 93
Dakar +221 33 889 4319
Barcelona +34 9311 366 36
London +44 (0) 12 93 822 922
19 December 2014
SAS swings to fourth quarter loss
News reports state that Scandinavian airline SAS on Thursday swung to a fiscal fourth-quarter net loss, scrapped its dividend and launched another cost-cutting program to offset falling fares amid cutthroat competition from low-cost rivals.
The Nordic region’s biggest airline has launched a series of restructuring measures in recent years and had to draw on its Scandinavian government owners for billions of kronor to stay in the air. Its aggressive cost-cutting programs have faced stiff opposition from labor unions, which two years ago accused the airline of bullying them into accepting job cuts and lower wages.
9 December 2014
UT Air files for bankruptcy
News reports state that Russian lender Alfa-Bank, has filed four new lawsuits against the country’s leading regional carrier UTair and UTair-Leasing. This comes a day after a leasing company filed a bankruptcy petition saying UTair failed to pay $67,000 for leased airplanes.
In late November, Alfa-Bank sued the airline in a Moscow court for an unpaid debt of $11.85 million. On Tuesday, court bailiffs seized UTair’s seven Mi-8 helicopters, TASS reports.
UTair on Monday rejected the bankruptcy reports in the media, saying it was operating in “standard mode.”
“We aim to constructively fix all the financial problems. Filing a bankruptcy petition is a standard tool used by the creditors that have a small amount of debt to claim,” Andrey Martirosov, UTair CEO said.
On Monday, UTair settled part of its $67,000 million debt to Avialeasing, TASS said. It had filed a bankruptcy petition against the carrier, claiming the airline had failed to pay the leases on a number of Tu-154-M planes.
Currently UTair is being sued for more than $13 million.
UTair is the third airline in terms of passenger traffic in Russia. The total debt of the company is about $1.1 billion (60 billion rubles). UTair revenue for the first half of 2014 amounted to $600 million (32.8 billion rubles) with net profit of $100,000 (5.5 million rubles).
1 December 2014
Malaysian Airlines losses widen further
News reports state that Malaysia Airlines said today that its third-quarter loss widened 54 per cent in the wake of two devastating air disasters that have sent its business into a tailspin and prompted a government rescue. The company's net loss for the three months ending September 30 reached USD 170 million, expanding from a 373.2 million ringgit deficit in the same period last year. The result marks the seventh straight quarterly loss for Malaysia Airlines, which already had struggled to stay competitive even before the mysterious loss of flight MH370 and the July 18 shooting down over Ukraine of flight MH17.
15 November 2014
LATAM net loss
News reports state that (Reuters) - LATAM Airlines LAN.SN, Latin America's largest airline, on Thursday reported a larger-than-expected net loss for the third quarter, due to a fall in business travelers and cargo traffic during soccer's World Cup in Brazil and weakening regional economic growth.
A foreign exchange loss of $144 million, mostly due to a depreciating Brazilian real, also weighed on the carrier's bottom line.
The net loss was $107.8 million in the three months to the end of September, traditionally its strongest quarter, the company said. That compared with a profit of $52 million a year ago and market forecasts for a $1 million loss, according to a Reuters survey.
14 November 2014
Air Berlin profit and share price slump
News reports state that Air Berlin PLC stated lower revenue for the third quarter and said net loss could be bigger than previously expected because of costs related to the plan to return the company to profit.
Net loss could exceed €350 million, projected Germany’s second biggest carrier, as it reported a 2.5% decline in revenue to €1.31 billion for the three months ended September 30. Net profit fell more than 50% in the quarter to €49.9 million, compared with the €101 million of last year.
CFO Ulf Hüttmeyer said the total amount of restructuring costs for the year will be around €100 million, €15 million of which the company already booked in the recent quarter.
13 November 2014
Flybe swings to loss
News reports state that British budget airline Flybe Group Plc swung to a pretax loss in the first half, hurt by one-off costs and a charge related to its exit from its Finland joint venture.
Flybe's stock fell as much as 23 percent to 102 pence, making it one of the top percentage losers on the London Stock Exchange.
The carrier posted a pretax loss of 15.3 million pounds ($24 million) in the six months ended Sept. 30, compared with a profit of 13.8 million pounds a year earlier.
Flybe was hurt by an increased flight delay claims provision, external costs related to surplus capacity and revaluation of U.S. dollar aircraft loans.
The company booked an impairment charge related to the sale of its 60 percent stake in loss-making Flybe Finland to partner Finnair.
Citing slower capacity growth and higher market costs, Liberum analyst Gerald Khoo cut his full-year forecast to a "small pre-tax loss".
The embattled carrier had only just returned to profitability last year, helped by brutal cost-cutting that involved giving up airport slots, slashing jobs, exiting unprofitable flight routes and grounding surplus fleet.
13 November 2014
Kenya Airways first half loss
News reports state that Kenya Airways swung into a first-half pretax loss after suspending flights to two Ebola-hit West African nations while attacks by Islamist militants in Kenya prompted Western countries to issue travel warnings, hurting the carrier's bookings.
The airline, which is part-owned by Air-France KLM , reported a pretax loss of 12.5 billion shillings ($140 million) for the period through September, including a paper loss of 5.4 billion shillings due to a writedown of planes being retired from its fleet.
Shares fell 15 percent to a session low of 7.60 shillings each after the results were released.
Mbuvi Ngunze, the airline's new chief executive, said bookings on long haul destinations like London plunged by as much as 40 percent during the peak summer holiday travel season as tourists shunned Kenya's coastal resorts. Kenyan authorities blame the attacks on militants from neighbouring Somalia.
"It meant that we actually didn't see the demand that normally comes with the peak season, when it is the main time that we make money," Ngunze told Reuters while expressing hope that bookings could improve as Kenya experiences fewer attacks.
Ngunze said the airline's planes were 64 percent full, lower than 69 percent in the corresponding period a year ago. Kenya Airways added an extra 800 passenger seats during the period, buying new Boeing Dreamliners and B777-300S.
Ngunze blamed the outbreak of the Ebola virus in three West African nations for the poor performance. The carrier stopped its flights to Liberia's capital Monrovia and Sierra Leone's Freetown in August due to fears of Ebola, at a likely cost of 3-4 percent of its annual revenue or $40 million.
"The biggest concern is that even in Kenya we talked up Ebola as if it was in this country and that has a direct impact. Actually people stopped flying to Kenya," he said.
12 November 2014
GOL Airlines increased losses
News reports state that Brazilian airline Gol Linhas Aereas SA on Tuesday posted a third-quarter loss of 245.1 million reais ($95.87 million), above the loss of 197 million reais recorded in the same quarter last year.
4 November 2014
Finnair losses increase
News reports state that Finnair Group reported a net profit of €16.6 million for the third quarter ended Sept. 30, down 38.3% from €27 million for the same period last year.
Operating profit was down 40.7% for the period, to €23.6 million from €39.8 million in the year-ago period.
The airline group attributed the disappointing performance to the strengthening of the euro against several revenue currencies, the ongoing weakness of the Finnish and eurozone economies, tumbling unit revenues, and declining cargo revenues.
14 October 2014
PEOPLExpress grounded
News reports state that Budget airline PEOPLExpress remains grounded on the Peninsula, but there’s new hope that it will take off soon.
The Newport News-based airline cancelled all flights at the end of September, after both planes it leased from Vision Airlines were grounded because of maintenance issues. The plan was for PEOPLExpress to be back up and running by this Thursday, October 16, but the airline announced recently that it won’t meet that goal.
Peninsula Airport Commission Chair Jim Bourey told WAVY.com he’s now hoping the airline will be back in the air by November.
“I would hope to see, and I would think PEOPLExpress would hope to be flying in November, certainly by mid-November, to be able to take advantage of the holiday season,” Bourey said. “We’re not sure that’s going to happen. We certainly hope that’s going to happen.”
As the airline continues to refund customers for cancelled flights, Bourey said the Peninsula Airport Commission, airport director and airline CEO are in constant conversation, all in hopes of getting PEOPLExpress off the ground again.
13 October 2014
Air Uganda finally closes down
News reports state that the board of the struggling Air Uganda has decided not to return the national carrier to service, blaming actions by the civil aviation authority and the resultant financial and reputational damage to the business.
Also thrown out was a proposed partnership that would have seen the government get equity in the airline in lieu of reviving the carrier which was liquidated 14 years ago.
The EastAfrican has learnt that, barring a positive outcome from high-level negotiations, the business case for Air Uganda, which was just five months short of its seventh anniversary before hell broke loose on June 17, has changed so radically over the past three months that a return to service is not viable.
According to sources at both the Ministry of Works and the Uganda Civil Aviation Authority (CAA), the letter communicating this decision was delivered to Works Minister Abraham Byandala last week.
It is understood that in the letter, which was partially a response to another of August 21 in which Mr Byandala turned down the Air Uganda board’s five per cent equity offer to the government free of charge, the carrier says actions by the CAA and current circumstances had altered the plan for the business.
According to the board, the CAA’s decision to withdraw the carrier’s Air Operators Certificate on June 17 citing safety concerns, the prolonged grounding and the takeover of its routes had caused “massive financial and irreparable damage to the reputation of Air Uganda and therefore the board sees restarting as unviable.”
More significant for Air Uganda was that withdrawal of the operator’s certificate led to automatic loss of membership to the IATA clearing house as well as the coveted and expensive IATA Operational Safety Audit (Iosa) accreditation it had attained just a month earlier.
This week, Air Uganda also formally handed back its offices at Entebbe International Airport to the CAA. The airline had earlier surrendered its sales office in Kampala to new entrant flydubai, which inaugurated services between Entebbe and Dubai on September 30.
This communication came just as Air Uganda and CAA had completed the most critical stages in the recertification process.
Air Uganda’s international operating licence was withdrawn alongside those of three other airlines on the Ugandan register, for a while making flights out of Entebbe to regional destinations such as Nairobi and Juba the most expensive segments to travel in the world.
The CAA withdrew the certificates after it updated its procedures, informing the operators of the new regime just days before the suspensions and, according to sources, in his August 21 letter, Mr Byandala regrets these actions by the air transport regulator.
As part of efforts to manage the resulting falling-out, the regulator proceeded to issue routes previously operated by Air Uganda to competitors such as RwandAir, Ethiopian Airlines, Fastjet and, more recently, flydubai.
3 September 2014
Aeroflot dives into loss
News reports state that leading Russian airline Aeroflot dived into loss in the first half of the year, buffeted by the problems afflicting the Russian economy, the group said.
The Russian economy is experiencing sharp slowdown, severely exacerbated by Western sanctions against Russia’s support for separatists in eastern Ukraine.
The slowdown, sanctions, and a fall of the ruble which raises the cost of foreign travel and holidays, have undermined travel agencies and put the brakes on recent 20-percent annual growth of air-passenger traffic.
Several travel agencies have gone bankrupt, stranding passengers abroad.
Aeroflot, which is controlled by the state, reported a net loss of 1.9 billion rubles (40 million euros, $53.0 million) in the first six months of the year from a profit of 45 million rubles in the same period last year.
The company has achieved firm growth and rising profits in recent years.
The airline, a member of the SkyTeam alliance with Air France-KLM, reported an operating loss of 1.4 billion rubles from a profit of 5.2 billion rubles at the same time last year.
Underlying operating profit as measured by earnings before interest, tax, depreciation and amortization, a key measure of performance, dropped 54.0 percent to 5.0 billion rubles.
“Slower economic growth rates in Russia, combined with significant one-off factors, had a negative effect on the group’s financial results in the first half of 2014,” deputy CEO Shamil Kurmashov said in a statement.
But the airline had outpaced market trends on some counts, he said, and sales rose by 9.4 percent to 140.3 billion rubles (2.9 billion euros), driven by a 10.3-percent rise in sales from passenger traffic.
But operating costs rose by 15.2 percent, mainly because of the addition of new aircraft, either bought or leased.
3 September 2014
China Eastern Airlines profit plummets almost 100%
News reports state that China Southern Airlines, the country's largest carrier by fleet size and passenger volume, posted a first-half loss of 1.02 billion yuan (HK$1.28 billion), as mainland airlines were hit hard by exchange losses caused by unprecedented depreciation of the yuan this year.
Interim profit at rival China Eastern Airlines Corp plunged 97.7 per cent from the same period last year to 14 million yuan.
Revenue growth of 9.15 per cent to 50.21 billion yuan at Guangzhou-based China Southern Airlines did not prevent it from sliding into the red after reporting a profit of 302 million yuan in the same period last year.
The airline carried 47.39 million passengers, 8.19 per cent more than last year, though the passenger load factor dropped 0.9 percentage point to 79.2 per cent.
Revenue at Shanghai-based China Eastern rose 2.68 per cent to 42.59 billion yuan. It carried 40.42 million passengers, up 6.94 per cent. Both airlines blamed exchange losses for their disappointing performance.
China Southern, which derives more of its revenue from international and long-haul routes than China Eastern, said "special circumstances" also affected its Southeast Asian and Xinjiang routes.
Mainland airlines are prone to currency risks as they have yuan-based revenue and dollar-based debt for their aircraft purchases and leases.
China Eastern said it had interest-bearing foreign currency debt equal to 66.71 billion yuan at the end of June, 96.2 per cent of which was in US dollars.
"As a result, large fluctuations in the exchange rate caused large translation losses and affected our profitability and development," the firm said.
The yuan declined as much as 3.39 per cent against the US dollar in the first four months of the year after steadily appreciating in the past decade.
Passenger yield, which measures per unit profitability of airlines, declined 1.69 per cent to 58 fen at China Southern and rose 0.17 per cent to 60 fen at China Eastern.
Both airlines said the second half, traditionally busier, remains filled with challenges and opportunities as travel demand hinges on the outlook for the Chinese economy.
The other Big Three state-owned carrier, Air China, reported a 55.42 per cent drop in earnings on Tuesday.
29 August 2014
Malaysian Airlines shares suspended
News reports state that Shares in Malaysia Airlines, the company hit by two air disasters this year, have been suspended ahead of a significant announcement.
The suspension of share trading comes ahead of the announcement of the airline's plans for restructuring, which could include job cuts and a change in top management.
Khazanah Nasional, which owns 70 per cent of the carrier, will hold a press conference later on Friday.
Major changes at Malaysia Airlines were foreshadowed earlier this month following the twin disasters of flights MH370 and MH17.
Flight MH370 disappeared on March 8, possibly over the Southern Ocean, and Flight MH17 was shot down on July 17 while flying over rebel-held eastern Ukraine.
A total of 537 passengers were killed in the two aviation tragedies.
Malaysia Airlines has reported a net loss of $104 million in its second quarter and said its earnings in the second half would be hit by lower passenger bookings after the two disasters this year.
The airline is expected to be de-listed and privatised.
Khazanah Nasional has previously said it would purchase all minority shares in the flag carrier and finalise a restructuring plan by the end of August.
29 August 2014
Virgin Australia posts triple losses
News reports Virgin Australia Holdings has posted an after-tax loss of A$355.6m ($332.6m; £200.5m) for the full year ending in June.
The result is more than triple the firm's previous year's loss of A$98.1m.
The carrier blamed weak consumer sentiment, overcapacity in the market and carbon tax costs for the loss.
Virgin also said on Friday that it would sell a 35% stake of its frequent flyer program to a private equity firm, valuing the program at A$960m.
The carrier, which is Australia's second largest behind Qantas, said ongoing uncertainty around the economy had also contributed to its full year loss and that it would not provide a forecast for the following financial year.
Virgin's underlying loss for the year of A$211.7m was in line with market expectations.
28 August 2014
Qantas suffes a huge $2.8 BILLION loss
News reports state that Qantas has suffered a huge $2.8 billion loss in the wake of the airline’s profit-draining battle with rival Virgin and another poor performance from its international division.
The airline posted a net loss of $2.84bn for the year to 30 June, compared with a $1m profit a year ago.
The result included a $2.6bn writedown to the value of its ageing international fleet.
Excluding the writedown and other one-off costs, Qantas made an underlying pre-tax loss of $646m, compared with a $186m profit a year ago.
Chief executive Alan Joyce described the result as “confronting”, but said the massive loss represented the year that is past.
“We have now come through the worst,” he said in a statement on Thursday.
“With our accelerated Qantas transformation program we are already emerging as a leaner, more focused and more sustainable Qantas group.”
The airline has ruled out selling or floating its profitable frequent flyer business, Qantas Loyalty, to fund its turnaround.
“After careful consideration, our judgment was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale,” Joyce said.
Qantas has also decided to separate its domestic and international arms, creating a new corporate entity for Qantas International.
Joyce said the Qantas Sale Act, recently passed by the federal parliament, had paved the way for the structural separation.
“This will have no impact on the day-to-day operations, network or staffing at Qantas International,” he said.
The carrier announced it would write down its entire fleet of Boeing 747s and A380s, at a value of $2.6bn.
The airline’s international division remained the biggest drag on the company, suffering an underlying loss of $497m for the year, more than double the $246m loss it posted a year ago.
Qantas attributed the result to increased competition from other carriers and record fuel costs.
Its discount carrier, Jetstar, made a $116m loss after losses from its Asian operations offset profits from its Australian division.
Qantas domestic saw its underlying earnings slump from $365m to $30m as a result of a bruising capacity war with Virgin.
The airline has been increasing capacity in an effort to maintain its 65% market share against a challenge from Virgin.
Critics were quick to lambaste Qantas for the result, including the former prime minister Malcolm Fraser, who took to Twitter to criticise Joyce soon after the results were released.
“Qantas chief Alan Joyce has many questions to answer. Board made foolish decisions, being eaten by Emirates,” he said in a tweet.
Qantas Loyalty was easily the most profitable part of the business, lifting underlying earnings from $260m to $286m during the year.
The airline’s frequent flyer program had 10.1 million members by 30 June.
Fuel costs across the company’s operations climbed by more than $250m to $4.5bn, and Qantas expects them to remain around the same level during the first half of 2014-15.
Qantas ruled out any new Jetstar ventures in Asia while it tries to get itself back to profitability, but Joyce was confident of the future of its operations in Singapore and Japan.
“In the world’s fastest growing aviation market, this is a major long-term opportunity that we continue to believe in,” he said.
“No new Jetstar ventures will be established while the group is focused on transformation, but we know that substantial value exists across the Jetstar airlines and we will realise that value over time.”
Qantas said it would be making no further job cuts beyond the 5,000 already announced as part of its $bn three-year restructuring plan.
28 August 2014
Air China profits plunge by 55.4%
News reports state that Air China Ltd. (753), the country’s largest airline by market value, posted a 55.4 percent drop in profit in the first six months of the year as a weaker yuan inflated overseas debt payments.
Net income declined to 510 million yuan ($82.9 million) in the six months ended in June from a year ago based on international accounting standards, the Chinese flag carrier said in a statement to the Shanghai stock exchange. The profit was in line with the 55 percent to 65 percent decline forecast by Air China on July 14.
The yuan fell more than 2 percent against the dollar in the first half of this year, driving up costs for Air China, which has 70 percent of its debt denominated in the greenback at the end of 2013. Foreign exchange losses are expected to also weigh on the earnings of China Eastern Airlines Corp. (670) and China Southern Airlines Co. (1055), which are slated to report first-half results later this week.
“Chinese airlines’ earnings are very sensitive” to the exchange rate, Patrick Xu, a Hong Kong-based airline analyst with Barclays, said in a note dated Aug. 20. “The earnings impact mainly comes from marking-to-market U.S. dollar-denominated debt and hence is mostly non-cash.”
Air China shares fell 1.8 percent to close at HK$4.88 in Hong Kong before the earnings announcement. The stock has dropped 16 percent this year, compared to a 7.6 percent gain in the benchmark Hang Seng Index.
27 August 2014
Tarom continues in the red
News reports state that Romania’s state owned airline Tarom expects EUR 26 million losses this year, according to the 2014 budget which was recently approved by the Government.
Tarom ended each of the last six years with losses, which totaled some EUR 270 million for the period. Not even the appointment of the private management didn’t bring the company to profit. In 2013, Tarom posted a EUR 29.4 million, 43% lower than in 2012.
Belgian Christian Edouard Heinzmann was appointed CEO of Tarom in November 2012, but in 2013 the company’s administration board wanted to fire him. In the end, the Transport Ministry decided to fire the board and keep Heinzmann as CEO.
Tarom’s budget that was approved by the Government features total revenues of EUR 350 million, 22% higher compared to those in 2013, which were EUR 288 million. These would be the highest revenues for Tarom since 2008.
The company’s total costs are also expected to rise to EUR 377 million, up 19% compared to 2013 (EUR 317 million).
26 August 2014
Wasaya Airlines continues losses, future not looking good
News reports state that near the end of July the chief of Fort Severn First Nation in northern Ontario went on the local radio and told the community Wasaya Airways was in trouble with growing debt, adding the future didn’t look good for the company that has been serving them for over a decade.
“It is my understanding from the last meeting that things will not work out. It has had problems for a while,” Chief Joseph Crowe told the radio audience July 25 in Cree, which was translated for this story.
The current status of Wasaya was discussed at a recent shareholders meeting in Thunder Bay where Wasaya management painted a bleak picture for the 12 chiefs that represent the communities that own the company.
APTN Investigates contacted Crowe Wednesday and he elaborated on the problem.
Crowe said management told the chiefs “Wasaya is going down” and was only surviving on a “special loan” from its bank.
One of the major problems is the chiefs have been racking up credit.
In December the tally was about $2.6 million and the chiefs were warned then too that Wasaya faced going bankrupt because of the excessive spending.
Crowe said that number has since grown to $3.1 million.
APTN was told Wasaya was having another meeting Thursday where a plan would be discussed to try and save the company.
But as an APTN investigation has found out, as we reported earlier this year, the financial instability of Wasaya has been going on for a number of years.
In 2012, Wasaya was losing money.
That year, the company lost $2 million and the chiefs were concerned.
21 August 2014
Fly Romania insolvency
News reports state that Necessair Consulting, the company controlled by Ten Airways director Catalin Butu that could supply tickets to Fly Romania flights, has asked for its insolvency in the Bucharest Tribunal. The trial term has been set for September 3rf 2014. Tickets for Fly Romania can no longer be purchased on the website.
Two months ago, Fly Romania flights were being cancelled left and right. The number of tickets bought did not match the number of flights according to Fly Romania representatives. Initial plans of transporting over 100,000 passengers this year for revenues of EUR 15 million collapsed, and Fly Romania only carried 1,300 of passengers in its couple of months of activities, given that the air company had a capacity of 6,000 passengers per day.
On August 5, Romanian businessman Ovidiu Tender announced his airline Ten Airways has ceased its collaboration with airline Fly Romania over unpaid debts amounting to EUR 400,000.
“Fly Romania is a privately owned company where I am not a shareholder. It is the property of Catalin Butu, former CEO at Ten, and our association with him damaged us both financially and in terms of image″, according to Ovidiu Tender.
Ovidiu Tender believes the money needs to come from somewhere and if it’s a fraud then he will sue his former employee and current owner of Fly Romania.
15 August 2014
Finnair expects significant loss
News reports state that Finnair Oyj (FIA1S) predicted a “significant loss” for the full year after second-quarter earnings declined as increased competition on long-haul routes and a stronger euro weighed on sales.
The airline had a net loss of 24 million euros ($32 million) compared with profit of 17.9 million euros a year earlier, the Helsinki-based company said today in a statement. Revenue declined 7.2 percent to 565.7 million euros.
“The impact of the weak economic prospects in Finland on domestic demand and intensified international competition, particularly in long-haul traffic,” hurt sales, Chief Executive Officer Pekka Vauramo said. Expenses paid in U.S. dollars and revenue in Japanese yen also took a toll as the euro strengthened.
An uncertain economic outlook for Europe and Asia weakened demand, the company said. The 18-nation euro bloc posted zero growth last quarter as its three biggest economies failed to expand. Restructuring at the carrier’s aviation service unit and the sluggish performance of its tour operator Aurinkomatkat Suntours also hurt results. Finland’s biggest airline is looking to trim annual costs by 200 million euros this year.
Finnair shares fell 2.8 percent to 2.45 euros at 11:54 a.m. in Helsinki, taking the decline to almost 12 percent this year and giving the airline a market value of 314 million euros.
7 August 2014
Skywest reports loss for second quarter
News reports state that SkyWest, Inc (SKYW: Quote) Wednesday reported a loss for the second quarter compared to profit last year, primarily reflecting lower than expected performance incentive bonuses under the company's flying contracts and the unfavorable flying contract settlements, which in turn hurt revenue. The company posted net loss of $14.7 million or $0.29 per share compared with net earnings of $20.7 million or $0.39 per share, for the same period last year. On average, analysts polled by Thomson Reuters expected the company to report a loss of $0.21 per share for the quarter. Analysts' estimates typically exclude special items. Operating revenues were down to $816.6 million from $839.1 million a year ago. Wall Street expected revenues of $800.21 million.
6 August 2014
Fly Olympic files for bankruptcy
News reports state that British travellers have been left with worthless tickets and ruined holiday plans after Swedish carrier Fly Olympic AB filed for bankruptcy and cancelled all of its flights and existing reservations.
UK holidaymakers who are abroad without a valid return ticket have been advised to book a flight with a different airline and those with booked tickets are advised to contact their credit card users.
The carrier was not ATOL-protected, meaning passengers stranded abroad will not automatically be given flights home and those with tickets will not be given a refund by the Civil Aviation Authority.
ATOL protects travellers from losing money or being stranded abroad if the tour operator goes out of business. If a licensed firm goes out of business, the CAA can give refunds to people who can’t travel and arrange for people abroad to fly home.
Fly Olympic AB operated flights from London's Gatwick Airport to Eritrea and Somalia via Stockholm and Athens.
In a notice posted on its website, Asian Pacific/Fly Olympic AB informed customers that it had filed for bankruptcy after 25 years in business.
1 August 2014
Austrian Airlines pofit drops 50%
News reports state that AUA Austrian Airlines, a unit of Germany's flagship carrier Lufthansa, saw its operating profit halve to EUR 10 million (USD 13.4 million) in Q2 as the company had to make reserves for the ongoing legal dispute over the collective agreement with the staff, AUA said without giving the amount of reserves.
AUA Airlines EBIT Halves to EUR 10 Mln in Q2 as Reserves Necessary / Picture: © Austrian Airlines
The group cut 2014 profit forecasts, among others due to the crises in Russia, Ukraine and Middle East: the number of passengers and sales have been falling there. AUA now expects a fullyear operating result at the level of last year (EUR 25 million) rather than the previously targeted improvement.
AUA had previously made no provisions for the dispute concerning the cancellation of the collective agreement with pilots and flight attendants two years ago.
In H1, AUA's operating loss widened to EUR 44 million from EUR 35 million gap a year earlier.
1 August 2014
Lufthansa struggles in second quarter
News reports state that Lufthansa has reported lower than expected second-quarter profit as ticket prices continued to fall on North American, Asian and European routes.
German flag-carrier Lufthansa also saw strike action weigh on results.
Lufthansa’s second-quarter operating profit was €359 million, below analyst expectations for €416 million, according to a poll from Reuters.
In the first half, strikes wiped off €60 million from profit in its core passenger airlines business.
“This quarterly performance was shaped by a number of one-off effects, such as strikes and currency devaluations.
31 July 2014
Moskovia Airlines to cease scheduled flights
News reports state that Moskovia Airlines will cease offering scheduled passenger flights from September 1 after a surprise inspection of the airline's operations earlier this month by the Russian Federal Air Transport Agency (Rosaviatsia) revealed glaring anomalies in the airline's finances.
The unannounced audit of the carrier's operations occurred in connection with a series of 'massive' multi-hour delays over the period July 11 to 13. Airline CEO Mikhail Alekseyev blamed the delays on a lack of suitable operational equipment which subsequently impacted negatively on Moskovia's finances.
The Izvestia newspaper reports the carrier has already been forced to suspend the sales of tickets for regular flights with effect from July 29.
"Rosaviatsia will conduct a thorough audit of Moskovia Airlines' operations - in particular its obligations to passengers, personnel, contractors and will, if necessary, impose additional restrictions - including the revocation of the carrier's Air Operators Certificate," the regulator said in a statement.
29 July 2014
Volaris reports second quarter loss
News reports state that Volaris reported a second-quarter net loss of 75 million Mexican pesos, compared to profit of 173 million pesos, a year ago. Loss per share was 0.07 pesos, compared to profit of 0.22 pesos. Loss per ADS was 0.74 pesos, compared to profit of 2.15 pesos, previous year. Total operating revenues were 3.31 billion pesos, compared to 3.03 billion pesos, prior year. The company said operating revenues increased 9%, due to a seasonally stronger second quarter and non-ticket revenue growth. Volaris traffic (measured in terms of revenue passenger miles or RPMs) increased 14% in the second quarter 2014 year over year.
28 July 2014
Flybe Profits fall by 11.9%
News reports state that UK regional carrier Flybe’s first-quarter revenue has fallen 11.9% as the airline continues to press ahead with restructuring.
During the first quarter ended June 30, Flybe generated £144.6 million ($246.8 million) in group revenue, down from £164.2 million in the prior-year period. Flybe CEO Saad Hammad described the performance as “in line with management expectations” and said the business is being prepared for future growth.
28 July 2014
TigerAir $52.6 million loss
News reports state that Singapore-based low-cost carrier (LCC) Tigerair Group reported an after-tax loss of SGD65.2 million ($52.6 million) for the quarter ended June 30, 2014 (1Q FY15), deepening the SGD32.8 million loss reported for the year-ago period (1Q FY14).
During the quarter, the airline reported an operating loss of SGD16.4 million, compounding the operating loss of SGD6.2 million reported for the year-ago period. Total revenue was down 28.4% to SGD169 million in 1Q FY15. Total expenses fell 23.5% to SGD185.4 million year-over-year.
The airline said the poor revenue performance was primarily due to the exclusion of Tigerair Australia from the group results after Virgin Australia acquired a 60% stake in the carrier last year.
In addition, Tigerair had to shoulder a SGD35.3 million share of the loss for the quarter of Tigerair Mandala, which ceased operations at the beginning of July. The group also recorded a SGD14.6 million provision for Mandala’s shutdown costs.
Tigerair Singapore reported an operating loss of SGD19.8 million for the first quarter of the current financial year, reversed from an operating profit of SGD5.9 million for the year-ago period. The airline said this was “nevertheless an improvement over the operating loss of SGD29.4 million recorded in the quarter ended March 31, 2014.”
23 July 2014
Norwegian Air Shuttle loss and decline in share price
New reports state that Norwegian Air Shuttle ASA (NAS.OS) Thursday swung to an operating loss in the second quarter as costs related to a the lease of aircrafts and a labour union strike offset higher passenger volumes.
Norway's budget airline swung to an operating loss of 85.1 million Norwegian kroner ($13.7 million) in the second quarter from a profit of 446.1 million kroner a year earlier. Still, it booked a quarterly net profit of 128.3 million kroner due to an income tax gain of 265 million kroner. In the year-ago quarter, net profit was 196.8 million kroner.
Revenue at Norway's budget airline rose to 5.04 billion kroner from 4.01 billion kroner while operating expenses swelled to 4.48 billion kroner from 3.13 billion kroner.
Norwegian, Europe's third-largest budget carrier by revenue, has rapidly expanded its international fleet capacity and opened several new bases in Europe in recent years.
Chief Executive Bjorn Kjos said the result reflects the expansion, including a 41% quarterly capacity increase and 16% passenger growth but also significant costs related to the start-up of its trans-Atlantic long-haul operation. Other one-off costs in the second quarter were related to the lease of aircrafts and a strike from the labour union Parat.
"There is also a high competitive pressure, particularly in the Scandinavian market," said Mr. Kjos.
23 July 2014
Air Uganda suspends operations
News reports state thatAir Uganda has indefinitely suspended operations after the Ugandan Civil Aviation Authority (UCAA) failed an ICAO audit and revoked its air operator’s certificate (AOC).
According to the airline, ICAO performed an audit between June 11-17, which identified shortcomings in the UCAA’s oversight and regulatory capacities.
In a statement, Air Uganda CEO Cornwell Muleya said the audit assessed the UCAA, rather than the airlines under its supervision. Air Uganda has held IATA Operational Safety Audit (IOSA) approval since 2011 and had been cleared for a further two years until 2015.
All AOCs issued by the UCAA were revoked June 17, grounding Air Uganda’s operations. “Each carrier was requested to submit a fresh application for an AOC, and in the meantime was required to cease operations, thus [being] forced to incur massive financial losses on a daily basis and suffer reputational damage,” said Muleya, who joined the airline last year.
He added that 31 days had passed since the initial grounding and recertification was still several weeks away. This has put the airline in breach of its lease contracts, which require its aircraft to continue flying.
“The extended period of the aircraft remaining grounded has thus, sadly, triggered these covenants and Air Uganda is now contractually obligated to return the aircraft to the lessors’ chosen facility abroad. The prolonged inability to generate any revenues has necessitated the airline’s board of directors to suspend indefinitely Air Uganda’s operations. This will unfortunately adversely impact key stakeholders, including the airline’s workforce,” Muleya said.
Air Uganda, which employs 231 staff, launched operations in 2007 at the request of the Ugandan government. It flew from its home base of Entebbe to Bujumbura, Dar es Salam, Juba, Kigali, Kilimanjaro, Mogadishu, Mombasa and Nairobi.
21 July 2014
Monarch faces continued recapitalisation
News reports state that the travel group behind Monarch Airlines and tour operator Cosmos is in talks with its Swiss owner to inject as much as £60m into the business amid continued tough trading.
Monarch Group, which is controlled by Switzerland’s Mantegazza family, is understood to be finalising its third recapitalisation within five years, The Sunday Telegraph has learnt.
Monarch has been forced to cut prices on its flights this year after a hoped-for recovery in the industry failed to materialise, and as rivals easyJet and Ryanair added more flights to their existing routes.
The family, led by patriarch Sergio Mantegazza, injected £75m into the business in 2011, just two years after putting a further £45m into the business.
The sources said that as part of conversations discussing debt financing options around the fleet deal, it became apparent that further equity was also needed. The expanded fleet will allow Monarch to continue to win new customers, as part of its network strategy focused on scheduled flights, rather than its traditional role as a charter carrier.
Monarch Group’s most recent results show the airline has been on the road to recovery of late, reporting a £5.9m pre-tax profit in the year to October 2013, after a £33m loss in the prior year.
However conditions in the travel industry continue to be tough, with overcapacity helping to push yields down, and operating costs continuing to rise.
The group – which also owns tour operators Avro and somewhere2stay – hired industry verteran Andrew Swaffield to run the airline in April of this year,
Monarch, which has a strong regional presence in the UK, flies from airports including Manchester and Leeds-Bradford.
A Monarch Group spokesman declined to comment.
18 July 2014
Air China profits expected to plummet 55%
News reports state that Air China expects its first-half net profit to plummet 55% to 65% compared with the net income of CNY1.12 billion ($182 million) in the year-ago period.
According to Air China’s written statement released by Shanghai Stock Exchange, the carrier attributed the sharp decline to exchange losses resulting from yuan depreciation.
Earlier this week, China Southern Airlines also reported a first-half net loss of CNY900 million to CNY1.1 billion ($146 million to ($178 million) compared with a net loss of CNY302 million in the year-ago period.
Industry analysts point out that Chinese carriers rely on exchange gains to earn profits with yuan appreciation.
China Eastern is also expected to report first-half losses.
Looking ahead, China’s big three carriers are predicted to continue to report profit declines or operating losses in the second half.
9 July 2014
KLM Air France profit warning send shares falling
News reports state that Air France-KLM profit warning bruised European airline shares on Tuesday, as the latest evidence of overcapacity set the stage for possible further job cuts.
Europe's second-largest traditional network carrier warned its 2014 profits could be as much as 12 percent lower than previously predicted, mainly as a result of overcapacity and resulting weak prices in both the passenger and cargo sectors.
Shares in the Franco-Dutch group fell more than five percent to 8.9 euros in early trading, reaching their lowest level since late February and dragging the European airline sector lower.
Its warning comes weeks after a similar jolt from Germany's Lufthansa, which warned on profit targets for 2014 and 2015 due to weaker-than-expected passenger revenue and cargo trends.
Among the factors it blamed were overcapacity on North Atlantic routes and competition from low-cost and Gulf carriers.
Since the Lufthansa statement, other smaller players have warned on profit such as Icelandair and Jet2.com (part of UK-listed Dart), SAS has said it will step up cost cuts while U.S. based Delta disappointed with its revenue figures.
"This warning is not entirely surprising given Lufthansa’s warning in June for the same reasons and the recent 21 percent decline in Air France-KLM’s share price," said Citi Research analyst Andrew Light in a note.
"We expect further restructuring actions to be announced later in the year."
European airline stocks were among the region's worst-performing shares, as the Air France-KLM profit warning spilled over to Lufthansa, whose shares fell 2 percent, and British Airways and Iberia parent IAG, whose stock dropped 4 percent.
Air France-KLM said the lower expected result - at 2.2-2.3 billion euros (1.7 billion pounds-1.8 billion pounds) down from previous guidance of 2.5 billion - still represented a 20 percent improvement on 2013 earnings before interest, tax, depreciation and amortisation.
"While not representing a turning point in market trends, the June traffic figures published today as well as bookings for July and August nevertheless reflect the over-capacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields," the airline said.
"This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter."
Air France-KLM is one of a number of airlines whose revenues remain blocked in Caracas because of a currency-related dispute.
The government requires airlines to sell tickets in the local bolivar currency, but has been slow to allow repatriation of funds under strict foreign currency controls.
A company official said the airline was owed some $290 million as a result of the dispute, out of a total estimated in May at $4.2 billion by the Venezuelan Airlines Association.
He said the cargo and Venezuela factors represented about half the resulting profit guidance adjustment together, with the fall in passenger yields accounting for the other half.
There has been talk Air France-KLM will sell all or part of its Martinair cargo division.
Mj
3 July 2014
Livingston Airlines operating license suspended due to financial problems
News reports state that Italian carrier Livingston has staved off an attempt by ENAC, the country’s civil aviation regulator, to suspend its operating licence.
Privately-owned Livingston operates three Airbus A320s on scheduled and charter services from its base at Milan Malpensa.
ENAC announced last week that it planned to withdraw the airline’s permission to operate from July 14, “given the obvious financial problems faced by the company.”
The company – its formal name is New Livingston, although its aircraft operate under the Livingston title – found itself in difficulties following the bankruptcy of one of its debtors, airport operator Aeradria.
This was exacerbated by the decision of the Sardinian regional government to withdraw a licence for a PSO route operated by Livingston between the Sardinian city of Alghero and Rome Fiumicino.
Livingston applied to Court of Busto Arsizio for a ‘procedura di concordato preventivo con riserva’, the Italian equivalent of Chapter 11 protection, “to overcome a temporary financial crisis.”
It also applied to ENAC to revoke the suspension of its licence. It pointed out to the regulator that it had bookings for more than 400,000 passengers over the summer holiday period, which were expected to generate “significant positive cash flows.”
The carrier announced late Monday night that the court had appointed a ‘judicial commissioner’ to oversee its financial restructuring process and that ENAC had withdrawn its threatened suspension. This meant that services would continue as normal past the previous 14 July cut-off point.
Livingston spokeswoman Silvia Ruscitto toldATW Tuesday that the granting of bankruptcy protection would give it breathing space to reform its finances.
She said that Aeradria, the operator of Rimini airport, had guaranteed Livingston’s operations after it stepped in two years ago to take over flights from the eastern Italian airport to Russia following the demise of fellow Italian carrier Windjet.
She added that Livingston was seeking some $8 million that the airline claimed was owed by the Sardinian regional government. “We have a claim against them in progress,” she said.
The Alghero-Rome route is heavily seasonal, losing money in the winter but solidly booked in summer as Italians head to the Mediterranean island for holidays. The flights ceased June 6, just as the summer season was getting underway.
* Under IPP's Insurance cover is excluded for all insurance or tickets issues on or after 3rd July 2014
26 June 2014
Fly Dalmation ceases trading
News reports state that Dalmatian (DLN, Split) has suspended operations after one of its investors reportedly pulled out at the last moment.
26 June 2014
FastJet widens losses
News reports state that FastJet Plc (FJET) said its operating loss widened in the first full year of flying after the discount carrier took steps to expand from Tanzania into South Africa, Zambia and Zimbabwe in a bid to build a pan-African carrier.
Losses reached $47.6 million, or $79.1 million including charges for restructuring forerunner Fly 540, while sales more than doubled to $53.4 million, London-based FastJet said today.
FastJet said in April it would raise 15 million pounds ($25 million) from share sales to fund growth, with EasyJet Plc (EZJ) founder Stelios Haji-Ioannou injecting cash to get 10 percent of the business. Capacity reached 60,000 seats in May, up 11 percent from a year earlier, though yields are under pressure from price cuts at Air Tanzania and Precision Air Services Ltd.
“Although the yield is at a level which could provide a profitable operation, resources are not being utilized fully,” Chief Executive Officer Ed Winter said in today’s statement. “Higher frequencies and more international routes are being progressively introduced to increase aircraft utilization.”
FastJet had an average load factor of 72 percent for the year, meaning its planes flew almost three-quarters full. Some 95 percent of planes are operated to schedule, an unusual display of reliability in Africa, where flights can commonly be hours late or be scrapped altogether at the last minute.
21 June 2014
SAS second quarter loss of $120 Million
News reports state that SAS Scandinavian Airlines has announced plans to slash nearly 300 positions following the company’s second-quarter net loss of SEK800 million ($120 million), widened from a SEK405 million loss in the year-ago period.
Second-quarter revenue fell 14.7% year-over-year to SEK8.4 billion from SEK9.9 billion during the 2013 second-quarter. Operating expenses came to SEK9.1 billion, down 9.1 % year-over-year, but nonetheless created a second-quarter operating loss of SEK661 million, widening a SEK109 million loss over the previous year’s April quarter.
“SAS posted a weak second quarter … which we are deeply disappointed with and which was substantially below expectations,” SAS president and CEO Rickard Gustafson said. “During the quarter, intensive competition and greater than expected price pressure in the Scandinavian air travel market reduced margins and increased market uncertainty.”
The full-time-equivalent personnel to be cut will come from SAS’ “support, administration, management and commercial functions—primarily in Scandinavia,” Gustafson said. “Furthermore, we are enhancing the efficiency of ground operations in Scandinavia and will optimize the base structure for flight crew in Norway.”
21 June 2014
Virgin America posts a first quarter net loss of $22.4 million
News reports state that Virgin America incurred a first-quarter net loss of $22.4 million, narrowed from a net deficit of $46.4 million in the 2013 March quarter, on a 4% rise in revenue to $313.4 million.
The quarterly net loss followed the San Francisco-based carrier’s first full year of profitability in 2013. President and CEO David Cush pointed out the first quarter marked the sixth consecutive quarter in which Virgin America has improved its financial results year-over-year. He also noted that Virgin America was hit hard during the quarter by the severe winter weather in the US northeast since the transcontinental-oriented carrier generates 30% of its revenue from the New York market.
Virgin America’s first-quarter expenses rose 3.2% year-over-year to $326.5 million. Operating loss was $13.1 million, narrowed slightly from an operating deficit of $15 million in the 2013 March quarter. First-quarter traffic increased 5.6% year-over-year to 2.2 billion RPMs on a 3% lift in capacity to 2.78 billion ASMs, producing a load factor of 79.2%, up 1.9 points. Yield decreased 2.8% to 12.56 cents.
20 June 2014
TigerAir Mandala closes
News reports state that Indonesian low-cost carrier (LCC) Tigerair Mandala has given its customers two weeks’ notice to shut down operations, despite negotiations with AirAsia for a last minute rescue deal.
The LCC saw a drop in passenger numbers of 31.5% in May and cut its Indonesian fleet to just four aircraft to stem losses. Due to diminishing prospects and no buyers, shareholders Tiger Airways Holdings, Saratoga Group and PT Cardig International have closed down the entire operation.
12 June 2014
Shares in Lufthansa nosedive on profit warning
News reports state that Shares in Lufthansa AG are down almost 13 percent after the German carrier issued a profit warning.
The airline said in a statement Wednesday that it is lowering its operating profit forecast to 1 billion euros ($1.35 billion) this year and 2 billion in 2015.
Lufthansa had previously predicted an operating profit of between 1.3 billion and 1.5 billion euros for 2014, and 2.65 billion euros next year.
The company says it lowered its forecast because of weaker passenger and freight demand, the impact of strikes and the fall in the value of Venezuela's currency.
Lufthansa shares stood at 17.41 euros during mid-morning trading on the Frankfurt exchange.
28 May 2014
Jet Airways group reports loss of $689 million
News reports state that India’s Jet Airways group has reported a consolidated loss of Rs 42 billion ($689 million) for the financial year April 2013 to March 2014, widened from Rs 7.7 billion in the prior-year period. The highest-ever loss for India’s second-largest airline was on a total income of Rs 194.4 billion ($3.2 billion), which rose marginally from Rs 190 billion in the same period last year.
The Jet Airways board met in Mumbai on Tuesday and agreed to a series of measures they hope will rebuild the business. The board announced the appointment of former Air Seychelles CEO Cramer Ball as the new CEO. Etihad Airways president and CEO James Hogan, and CFO James Rigney, attended Jet’s board meeting for the first time after an equity deal between the two carriers received regulatory approvals.
Jet chairman Naresh Goyal said, “We need to take stringent measures to ensure our success in this challenging and competitive aviation industry. There can be no short-term solutions. The changes required will take time to implement.” Jet has established a taskforce to implement a major restructuring of the business.
Continuous losses for the last seven years, largely on the airline’s Boeing 737 domestic routes, have eroded its net worth substantially. Investors are hoping Etihad will help recapitalize the airline. In a statement to the stock market, James Hogan said, “We are delighted to be investing in Jet Airways at this critical point in its history. We are a long-term strategic investor and [are] committed to supporting Jet Airways as it re-engineers its business to achieve sustainable profitability. The opportunities and benefits for both carriers are enormous.”
Indian carriers have been posting higher losses; growing discounting practices have put pressure on yields. Competition is likely to get tougher as two new airlines expect to launch in the next year.
24 May 2014
Pegasus Airlines loss first quarter $50.2 million
News reports Turkey’s fast-expanding low-cost carrier (LCC) Pegasus Airlines recorded a first-quarter net loss of TL104.5 million ($50.2 million), widened sharply from a deficit of TL6.3 million in the year-ago quarter.
First-quarter revenue jumped 36% to TL512 million from TL377 million year-over-year, with ancillary sales per passenger rising significantly to TL27.3 from TL19.5 in the same period last year.
Pegasus carried 4.08 million passengers in the quarter, up 25.4% year-over-year.
CEO Sertac Haybat said the first quarter of the year is always a difficult one for LCCs. “Due to seasonality and the recent fluctuation in the exchange rates, I can say that this really has been a tough period for the sector. As a result, the first quarter was not a profitable period for us,” he said.
22 May 2014
Air Asia loss
News reports state that Malaysia’s AirAsia X reported a first-quarter net loss of MYR11.3 million ($3.5 million), reversing a net profit of MYR50.2 million for the year-ago period.
The long-haul, low-cost affiliate of the AirAsia Group said that, despite a 60.1% increase in capacity—its highest ever year-over-year quarterly capacity growth—to 6.2 billion ASKs, the carrier saw revenue rise 40% to a record MYR750 million for the quarter. Capacity growth is expected to taper off in the coming quarters, in line with the carrier’s aircraft delivery commitments.
AirAsia X CEO Azran Osman-Rani said, “The aggressive capacity expansion phase we undertook … is starting to bear fruit. We’ve proven we can stimulate new demand and achieve a market leadership position. As new capacity typically takes 12 months to reach breakeven, we expect to see yield improvement and an earnings turnaround in the second half of this year, after the seasonally weakest second quarter, and taking into account the aviation industry starting to stabilize its capacity roll-out.”
First-quarter operating expenses increased 64.1% to MYR786 million compared to the year-ago period. While many cost items—such as fuel, aircraft and engineering—were adversely affected by the decline in value of the Malaysian ringgit against the US dollar, costs for controllable items fell 12% year-on-year as a result of cost control initiatives and scale advantages.
20 May 2014
Thai Airways reports heavy losses of $804 million
News reports state that Thai Airways reported a first-quarter net loss of THB2.62 billion ($804 million), reversed from a net profit of THB8.29 billion in the year-ago period. The airline said it was “prominently impacted” by recent political unrest in Bangkok.
First-quarter operating revenue was THB49.5 billion, down 11.6% while expenses were up 0.4% to THB51.8 billion, producing an operating loss of THB2.23 billion.
Thai said the losses were mainly driven by the dramatic slowdown in visitors to Thailand. This quarter it reported carrying 4.81 million passengers, down 15.3% year-over-year. MRPKs were down 12.6% to 14.68 billion. Load factor fell 9.7 points to 70.1%. Yield was down 1.1 %.
16 May 2014
Malaysian Airlines losses widen by 59%
News reports state that Malaysia Airlines has seen its losses widen after Flight 370 vanished over two months ago, raising questions about the future of the 76-year-old carrier.
The company's net loss rose by 59% to 443m ringgit ($138m; £82m) in the January-to-March period, marking its fifth straight quarter of losses.
The firm attributed it to "tough operating conditions" and "negative sentiment".
Investors shrugged off the news with shares rising 2.4%.
Only 30% of the company is able to be bought freely on the stock exchange in Kuala Lumpur, with the rest held by state investment firm Khazanah Nasional.
Of the 30% that trades on Malaysia's stock exchange, most of that is owned by the country's pension funds and other institutions, leaving a small proportion for retail investors to trade.
Overall though, the firm has lost more than 40% of its market value this year.
16 May 2014
Air Berlin reports increased losses for first quarter of $288 million
News reports state that Airberlin reported a first-quarter net loss of €209.8 million ($288 million), widened from a net loss of €196.3 million in the year-ago quarter.
First-quarter operating loss was €182.8 million, narrowed from an operating loss of €188.4 million in the year-ago period. Group revenue fell to €761.8 million, down 3.8% year-over-year, which the company attributed to the shift of Easter business to April.
The airline said favorable cost development created a slightly improved operating result in a difficult market environment with high pressure on capacity utilization; yield was slightly better than the previous year.
“There is no doubt of the need for fundamental change and working on developing a sustainable business model,” CEO Wolfgang Prock-Schauer said in a statement.
Revenue per ASKs fell to 6.54 euro cents from 7.10 euro cents in the year-ago quarter.
Airberlin said it was able to reduce costs per ASKs by 8.2%, ex-fuel, compared to the same period last year. CASK was down 8% year-over-year.
Airberlin said its cost-cutting Turbine turnaround program demonstrated tangible effects in the first quarter.
“We have improved our cost structure … this year, we will be focusing particularly on increasing our turnover and will be substantially assisted by a new revenue management system,” Prock-Schauer said.
The oneworld member will receive support from external consultants to develop a viable and sustainable business model and a detailed plan for its implementation.
Abu Dhabi-based Etihad Airways, which owns a 29.2% stake in airberlin, has assigned two of its executives to oversee airberlin’s restructuring process.
Airberlin raised €252 million from the issuing of new bonds as part of its recently announced recapitalization program to return to profitability.
Airberlin said the recapitalization, in the amount of €550 million, should strengthen its equity capital and liquidity position for the long term.
In 2013, the German carrier reported a full-year net loss of €315.5 million.
15 May 2014
LATAm Airlines first quarter loss of $41.3 Million
News reports state that Santiago-based LATAM Airlines Group has reported a first-quarter net loss of $41.3 million, reversed from a net income of $42.7 million in the year-ago quarter. The company said the results were due to non-recurring costs related to fleet restructuring. Excluding the one-off costs, it made a net profit of $80.7 million, up 88.7% over a net profit of $42.7 million in the year-ago quarter.
The oneworld member is the merger created between Santiago de Chile-based LAN Airlines and Brazil’s TAM Airlines in 2012.
First-quarter revenue was $3.2 billion, down 6.8% year-over-year, which the company attributed to a 6.4% decrease in passenger revenues and a 12.5% decrease in cargo revenues, partially offset by an 11.6% increase in other revenues. Expenses for the quarter were down 7% to $3.1 billion, producing an operating income of $112.6 million, down 1.4% year-over-year.
13 May 2014
Turkish Airilnes first quarter net loss of $108.7 million
News reports state that Turkish Airlines has reported a first-quarter net loss of TRY226 million ($108.7 million), which the company attributed to seasonality factors and foreign exchange rate movements.
9 May 2014
SkyWest posts a $22.9 Million first quarter loss
News reports state that Utah-based SkyWest Inc., parent of regional carriers SkyWest Airlines and ExpressJet Airlines, incurred a first-quarter net loss of $22.9 million that it largely blamed on severe winter weather.
The company had previously warned that 21,000 weather-related flight cancellations during the three-month period ended March 31 would negatively affect its financial results. The first-quarter net loss was reversed from a $3.2 million net profit in the prior-year period.
“As a result of these flight cancellations, SkyWest not only experienced a negative effect on total operating revenues due to block hours not flown, but also experienced increased total operating costs due to its obligations to pay flight crews for canceled flights, as well as incurring additional maintenance and other expenses from the negative effects of the severe weather,” SkyWest said in a statement.
The company’s first-quarter revenue declined 3.9% year-over-year to $772.4 million while expenses rose 1.6% to $800.2 million, producing an operating loss of $27.8 million, reversed from an operating profit of $15.6 million in the 2013 March quarter.
SkyWest’s first-quarter traffic increased 0.4% year-over-year to 7.28 billion RPMs on a 2.2% cut in capacity to 8.99 billion ASMs, producing a load factor of 80.9%, up 2.1 points. Yield declined 3.7% to 10.4 cents as block hours flown dropped 4.4% to 546,813.
9 May 2014
Lufthansa posts first quarter loss of €252 million
News reports state that Lufthansa Group posted a first-quarter net loss of €252 million ($351 million), narrowed from a net loss of €458 million in the year-ago quarter.
The company said the results were due to continued progress with its SCORE results-enhancement program.
In what is traditionally the weakest quarter of the year, the company posted operating losses of €245 million, narrowed from a €359 million operating loss in the first quarter of 2013.
First-quarter revenue fell 2.5% to €6.5 billion and operating income was €7 billion, down 2.5% year-over-year. At the same time, total first-quarter operating expenditure was reduced 6% to €7.2 billion compared to the year-ago period.
8 May 2014
Norwegian Air Shuttle widens losses
News reports state that Budget carrier Norwegian Air Shuttle has reported a first-quarter pre-tax loss of NOK813 million ($137 million), widened from a pre-tax loss of NOK160.1 million reported for the same period last year.
The airline said that, despite strong growth in passenger numbers and a high load factor, the additional costs of wet-leasing replacement aircraft on long-haul routes, as well as a weaker Norwegian currency had adversely impacted results.
Total revenue for the first quarter was NOK3.55 billion, up 22% year-over-year, while the number of passengers carried grew 24% to 4.9 million. RPKs were up 50% to 7.3 billion, and ASKs were up 48% to 9.4 billion. Load factor was also up one point to 77%, but yield was down 22%.
In addition, costs were up by a significant 53% to NOK4.2 billion from NOK2.7 billion during the year-ago period, with technical maintenance costs (+67%), general and administrative expenses (+62%), leasing costs (+60%), handling charges (+49%), aviation fuel (+48%), sales and distribution expenses (+46%), and airport and air traffic control charges (44%) accounting for the greatest increases.
8 May 2014
Tigerair continues losses
News reports state that Tigerair is further restructuring its operation in a bid to turn around its sagging financial performance. The Singapore-based low-cost carrier group incurred a net loss of SGD223 million (USD177 million) in the year ending 31-Mar-2014 compared to a loss of SGD45 million (USD36 million) the prior year.
Market conditions in Singapore have become challenging with excessive capacity levels provoking a reduction in yields and load factor. Tigerair Singapore reported an operating loss of SGD59 million (USD47 million) in FY2014 compared to a profit of SGD57 million (USD46 million) in FY2013.
All of the group’s overseas affiliates continue to be unprofitable, dragging down Tigerair’s bottom line and forcing the group to adjust its fleet plan. The situation at its Indonesian affiliate is particularly challenging, prompting the group to look at divesting its investment in Tigerair Mandala. The group is grounding five of Mandala’s nine A320s and three of the five aircraft being returned from Tigerair Philippines. The removal of the eight aircraft along with the Mar-2014 cancellation of nine A320 orders which would have been delivered in FY2015 and FY2016 are two components of a turnaround initiative
2 May 2014
Aer Lingus losses increase further
News reports state that Aer Lingus reported an operating loss of €48.5 million ($67 million) in the first quarter, widened from an operating loss of €45.5 million a year ago. Revenue for the quarter, at €259.4 million, remained flat year-over-year.
Aer Lingus does not release net profit figures for its quarterly filings.
The airline said the results were due to the Easter holiday period shifting into the second quarter and the threat of industrial action in early March by Ireland’s Service, Industrial, Professional and Technical Union (SIPTU), which caused a sharp fall-off in bookings ahead of the busy St. Patrick’s Day holiday.
CEO Christoph Mueller said the threatened strike, over a long-running pension dispute, had caused numerous flight cancellations, forcing the carrier to hire replacement aircraft. The strike was called off shortly before it was due to start.
2 May 2014
Volaris posts a increased net loss of $28.3 Million
News reports state that ultra low-cost carrier (ULCC) Volaris posted a first-quarter net loss of MXP370 million ($28.3 million), widened from a MXP65 million net loss in the year-ago period.
“Market conditions were very difficult,” Volaris CEO Enrique Beltranena said in a statement, citing sluggish Mexican economic growth, weak demand and exchange rate volatility. “While I am disappointed in the quarter’s financial results, we responded well to the challenges,” he said. “We managed capacity and pricing in a responsible way, reaffirmed our cost control discipline and grew non-ticket revenues.”
Total operating revenue was MXP2.78 billion, down 9.3% from MXP3.06 billion in the 2013 first-quarter. Operating expenses were MXP3.26 billion, up 7.9% from MXP3.02 billion in the year-ago quarter.
1 May 2014
Nippon Airways parent ANA income down 56.2%
News reports state that All Nippon Airways parent ANA Holdings posted net income of ¥18.8 billion ($183 million) for the 2013 financial year ended March 31, 2014, down 56.2% from ¥43.1 billion year-over-year.
The weakness of the Japanese yen, which helped push fuel costs 22% higher in FY2013, was cited as the main reason for the results.
Operating revenue was up 7.9% to reach a record high of ¥1.6 trillion from ¥1.48 trillion in the year-ago period. However, sales growth in each business segment, operating income, recurring profit and net income were all down compared to FY2012.
Operating expenses were up 11.3% to ¥1.54 trillion from ¥1.4 trillion in FY2012, and operating income was down 36.4% to ¥66 billion from ¥104 billion a year earlier.
25 April 2014
United Continental Holdings reports a first quarter loss of $609 million
News reports state that United Continental Holdings, parent of United Airlines, reported a first-quarter net loss of $609 million, including $120 million of special charges, deepened from a net loss of $417 million in the 2013 first-quarter. Subtracting special charges, United’s first-quarter net loss was $489 million, compared to first-quarter 2013’s net loss, excluding special charges, of $358 million.
Total revenue was $8.7 billion, down 0.3% year-over-year. First-quarter consolidated passenger revenue decreased 2.3% year-over-year to $7.4 billion on a consolidated capacity reduction of 0.3%.
First-quarter consolidated PRASM fell 2% year-over-year to 12.91 cents. Weather-related cancellations reduced first-quarter consolidated PRASM by 1.5 percentage points.
“The winter storms severely impacted the operations in the first quarter. In total, we canceled 35,000 flights … including 30,000 flights in our regional operations,” United vice chairman and chief revenue officer Jim Compton said. “This number represents two-and-a-half times the cancellations we had in the first quarter of last year. Put another way, this is the equivalent of not flying for seven of the 90 days this past quarter.”
First-quarter operating expenses increased 0.7% year-over-year to $9 billion, resulting in an operating loss for the quarter of $349 million, surpassing by $85 million the operating loss United reported in the year-ago quarter.
United’s first-quarter consolidated traffic decreased 0.3% year-over-year to 46.4 billion RPMs on a 0.3% capacity decrease to 57.2 billion ASMs, producing a passenger load factor of 81.1%, which remained flat compared to the year-ago quarter. Adverse weather conditions during the quarter drove the decreases, United said. Passenger yield fell 2% year-over-year to 15.92 cents.
“Our financial performance in the first quarter was disappointing,” United chairman, president and CEO Jeff Smisek said. “Although the historic winter weather adversely affected our result this quarter, we know we can do better. We are committed to expanding our profits this year and to improving our profitability each year after that.”
22 April 2014
Thai Airways losses bigger than expected
News reports state that Thai Airways International Pcl warned on Monday of a steeper-than-expected first-quarter net loss as passenger numbers fell due to prolonged political unrest in Thailand and fierce competition from low-cost carriers.
"First quarter net loss will be higher than what we had expected by 30 million baht," acting president Chokchai Panyayong told reporters after a board meeting. He did not give an exact figure for the anticipated loss.
Passenger numbers in March alone dropped almost 21 percent from the same month a year ago to 1.59 million, he said.
The number of seats sold in the first quarter also fell to 71.1 percent from 79.8 percent a year earlier, with March seeing a year-on-year drop of 11.6 percentage points to 68.7 percent.
Thai Airways, the country's national carrier, posted a third successive quarter of losses in the fourth quarter after a falling baht hit revenue and anti-government protests deterred foreign tourists, especially from China, Japan and South Korea.
4 April 2014
Qantas is plunged into red zone by Fitch
News reports state that Moody and Fitch subsidiary Fitch Ratings has put Qantas in its “red pain zone” category.
This category is applied to companies with plunging cash flow and increasing net debt, the Sydney Morning Herald reported.
The label has been applied just as the airline faces higher borrowing costs as a result of credit ratings agency Standard and Poor’s downgrading the airline’s stock to junk status.
Fitch analyst Matt Jamieson said that the Qantas and Virgin capacity war was taking its toll on Qantas’ bottom line.
“Virgin Australia … Qantas key competitor has been so aggressive in capacity additions that a structural shift has occurred,” Mr Jamieson said.
Mr Jamieson also said that the airline was facing higher debt because of trying to upgrade its fleet, while higher fuel use reduced cash flow.
Qantas has on average reduced the age of its fleet by 7.6 years, which has also added to its debt burden.
2 April 2014
Oman Air $294.3 Million loss
New reports state that Middle Eastern carrier Oman Air has reported a loss of OR113.3 million ($294.3 million) for 2013, widened 16% from 2012. Revenues rose 10% to OR381.7 million.
Passenger boardings climbed nearly 13%, to 4.99 million, while cargo volumes rose 7% to 119,700 tonnes. Freight operations benefited from the enhanced capacity offered by a block space agreement with DHL between Muscat and Dubai.
At the carrier’s AGM, chairman Darwish Bin Ismail Al Balushi said Oman Air’s losses were attributed to continued investment in new aircraft. The carrier, which is growing rapidly in an attempt to achieve critical mass, will take delivery of the first wave of 20 new aircraft later this year.
Oman Air plans to spin off several aspects of its activities into separate companies as the carrier continues to expand.
Al Balushi said the airline’s operations over the past two decades have gradually diversified into areas including charters, ground handling, cargo handling, catering and duty-free businesses.
He said the carrier’s continued growth means it might be better managed as independent businesses with dedicated managements. Therefore, Oman Air has planned to spin them off into separate legal entities beginning with ground handling and cargo handling businesses. They would continue to operate within an Oman Air Group. Final decisions and timeframes will be announced following consultations with the government, the airline’s owner.
28 March 2014
GOL posts a net loss of $306.4 Million
News reports state that Brazilian low-cost carrier GOL posted a full-year 2013 net loss of BRL724.6 million ($306.4 million), cutting by more than half (52.1%) the BRL1.51 billion loss the airline posted in 2012.
GOL’s 2013 revenue rose 10.5% to BRL8.95 billion as expenses fell 3.5% to BRL8.69 billion, producing an operating profit for the year of BRL266 million, rebounding from the BRL905.6 million operating loss the airline reported in 2012.
Full-year yield grew 19% to BRL 23.42 cents as RASK grew 15.5% year-over-year to BRL 18.04 cents and CASK increased 0.7% to BRL 17.51 cents. GOL’s CASK excluding fuel also grew 0.7% year-over-year to BRL 10.23 cents. GOL’s fuel expenses for 2013 were BRL3.6 billion, down 3.5% from 2012; 1.5 billion fuel liters were consumed by the company in 2013, down 8.7% from 2012.
GOL’s 2013 passenger traffic fell 4.7% to 34.7 billion RPKs on a 4.3% decrease in capacity to 49.6 billion ASKs, generating a load factor of 69.9% for the year, down 0.3 point from 2012. Total passengers in 2013 came to 36.3 million, down 7.3% from 2012.
For GOL’s 2013 fourth-quarter, the carrier posted a net loss of BRL19.3 million, a BRL428 million improvement on the BRL447 million loss GOL posted in 2012’s December quarter. Fourth-quarter revenue gained 28.7% year-over-year BRL2.73 billion; expenses grew 3.6% year-over-year to BRL2.57 billion, leaving an operating profit of BRL162.9 million, reversing the BRL357.6 million operating loss the carrier reported in the 2012 fourth-quarter.
14 March 2014
Lufthansa group profits down 75%
News reports state that the Lufthansa Group reported 2013 annual net income of €313 million ($434.2 million), down 75% from a €1.22 billion profit in the year-ago period.
Revenue fell 0.4% to €30 billion and operating profit was €697 million, down 16.9% year-over-year.
28 February 2014
Qantas reports half year losses
News reports state that Qantas Group reported a first-half fiscal year 2014 net loss of A$235 million ($208 million), a A$346 million plunge from the A$111 million profit Qantas posted in the year-ago period. The Group’s first half ended Dec. 31, 2013.
First-half revenue was A$7.9 billion, down 4% compared to the year-ago period.
For the first half, Qantas Domestic reported underlying EBIT of A$57 million, a 73.9% drop from the Group domestic carrier’s A$218 profit during the year-ago period.
Qantas International posted an underlying EBIT loss of A$262 million in the first half, nearly tripling the A$91 loss the Group posted for its international carrier in first-half 2013.
Qantas subsidiary Jetstar reported an underlying EBIT loss of A$16 million, down from the A$128 million profit posted by the Group’s low-cost carrier in first-half 2013.
Qantas Freight posted underlying EBIT of A$11 million, down 50% from the A$22 million profit posted in first-half 2013.
“We are facing some of the toughest conditions Qantas has ever seen,” Qantas CEO Alan Joyce said. “Australia has been hit by a giant wave of international airline capacity … the Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign-backed airlines and yet retain access to Australian bilateral flying rights.”
28 February 2014
Virgin Australia reports half year loss
News reports state that Virgin Australia has slumped to a first half loss of $83.7 million as it fights to take market share from rival Qantas.
The result, for the six months to December 31, compares to a $23 million net profit a year ago.
The company blamed the decline in performance on a challenging trading and competitive environment, ongoing subdued consumer sentiment and economic uncertainty, the effect of strong market capacity growth and an unrecovered $27 million cost of the carbon tax.
Virgin Australia chief executive John Borghetti said the Australian aviation market continued to be impacted by significant capacity growth which occurred last year.
26 February 2014
Thai Airways third successive quarter loss
News reports state that Thai Airways International booked a third successive quarter of losses on Tuesday after a falling baht hit revenue and pushed up its foreign debt and the political unrest in Thailand deterred visitors from abroad.
The result comes after a turbulent start to 2014 which has seen the resignations of both the chairman and president.
Earnings in the last three months of 2013 suffered from a rise in the cost of repaying roughly $5 billion worth of primarily euro-denominated debt, caused by a 5.8 percent decline in the value of the baht against the euro.
The baht also fell against the dollar and yen - which, with the euro, account for 75 percent of revenue - due to concerns for the economy following the anti-government protests.
The protests also led to a slowdown in visitors just as the airline had increased capacity with the delivery of new planes. The result was a fourth-quarter net loss of 5.65 billion baht ($174 million), which compared with a profit of 792 million baht in the same period of 2012 but was better than expected by analytss, which on average had forecast a loss of 7 billion baht according to a Reuters survey.
For the full year, the airline booked a net loss of 12 billion baht, which compared with a profit of 6.2 billion baht in 2012.
Shares in Thai Airways closed down 1.5 percent ahead of the earnings release, compared with a 0.2 percent rise in the benchmark index. The release was initially scheduled for Feb. 21 and then midday Feb. 25, but was delayed while awaiting the auditor's sign-off.
21 February 2014
Malaysia Airlines worst quarterly loss this year
News reports state that Malaysia Airlines (MAS) made a RM375.4mil loss in the three months ended Sept 30 compared with a net profit of RM37.08mil a year ago, as it reported the worst quarterly results this year after the management adopted an aggressive pricing strategy to fill up increased seat capacity and defend market share even as the weaker ringgit drove up the cost of operating its expanding fleet.
“We are extremely disappointed with these results which emphasise the need to maintain our focus on cost control and drive improved efficiency and performance across all divisions,’’ MAS group chief executive officer Ahmad Jauhari Yahya said in a statement yesterday.
The business environment for the airline industry remained “very challenging” despite continued passenger growth,
“Jet fuel prices are still high, exchange rates are uncertain, competition is increasing and continued pressure on yield is impacting all sectors,’’ MAS said yesterday in a separate statement to Bursa Malaysia.
MAS’ dismal performance in the third quarter means the airline has yet to make a profit this year. Losses over a nine-month period swelled to RM830mil compared with a loss of RM484mil reported over the same period last year.
17 February 2014
Moskovia Airines files for bankruptcy
News reports state that Moskovia Airlines (3R, Moscow Zhukovsky) interim management have filed for bankruptcy with a Moscow court 8 months after a previous motion filed by the Finance Leasing Company was dismissed. Russian news portal AEX.ru says the FLC has repeatedly tried to have Moskovia declare bankruptcy over debts amounting to RUB94.2million (USD2.71million). Established in 1995, Moskovia Airlines is based at Moscow Domodedovo and provides regular and charter passenger and cargo flights throughout Russia, as well as to other countries in Europe, Asia, and Africa, using a fleet consisting of a B737-400, a B737-700 and two SSJ 100-95s. It is currently still operating.
11 February 2014
Jet Airways fourth straight quarterly loss
News reports state that India's Jet Airways has reported a loss of Rs 2.83 billion ($47.3 million) on revenues of Rs 19.7 billion for the quarter ended Dec. 31, 2013. This is the airline’s fourth straight quarterly loss.
The Mumbai-based airline had reported a profit of Rs 850 million in the same period last year. It has been unable to shake off the impact of high fuel costs and pressure on fares brought on by competition. Abu Dhabi’s national carrier Etihad bought a 24% stake in the airline last year.
Jet CFO Ravishankar Gopalakrishnan said the losses were lower because of improved passenger yields and sustained market share. Management said it expects the current quarter (January to March) to be muted in terms of passenger yield and seat factor.
10 February 2014
Merpati Nusantara Airlines flights grounded
News reports state that The government has finally opted to temporarily halt the operations of state-owned Merpati Nusantara Airlines after the troubled carrier failed to resolve its financial difficulties.
Transportation Ministry director general for air transportation Herry Bakti Gumay said in Jakarta on Saturday that the airline would no longer be allowed to fly from Monday next week.
“Next week, we will freeze Merpati’s air operator certificate [flight permit],” he said, adding that his office did not have any choice but to temporarily do so as no solution to the airline’s financial problems had been found.
7 February 2014
Carpatair goes into Bankruptcy protection
News reports state that Romanian regional carrier Carpatair has been given the legal go-ahead to restructure under bankruptcy protection.
The company blamed €30 million ($41 million) in legal damages it has been charged as a key reason for filing for insolvency. The legal disputes arose out of anticompetitive practice acusations leveled at Timisoara Airport, Carpatair’s home base, that are being investigated by the European Commission, local courts and authorities.
During the restructuring process, the company will be run by the current management team led by Nicolae Petrov, under the supervision of an appointed insolvency administrator.
Operations will continue, although the winter season schedule will be restricted to profitable flights only, according to local reports.
* Under IPP's policies cover will be excluded for tickets or policies issued on or after 23rd January 2014 due to the company filing for Bankruptcy protection from this date.
7 February 2014
Singapore Airlines profits down 65%
News reports state that Singapore Airlines parent SIA Group reported a net profit of SGD50 million ($39 million) for the quarter ended Dec. 31, 2013, down 65% from SGD142.5 million during the same period the previous year.
SIA said this third-quarter downturn was largely due to exceptional items, including an impairment loss on four surplus freighters that have been put up for sale, settlement of penalty payments in the US and Switzerland, and share of losses resulting from its increased shareholding in Tiger Airways.
7 February 2014
Korean Air posts a $362.1 million loss
News reports state that Korean Air has posted a net loss for 2013 of KRW385 billion ($362.1 million), a year-over-year drop of KRW641 billion from 2012. Full-year revenue fell 4% year-over-year to KRW11.85 trillion. Operating expenses also fell (-2%) to KRW11.87 trillion, resulting in an operating deficit of KRW18 billion for the year, reversing the company’s operating profit of KRW229 billion reported for 2012.
The South Korean flag carrier is reporting a fourth-quarter 2013 net loss of KRW58 billion, a difference of KRW198 million from fourth-quarter net profits in 2012. Fourth-quarter operating revenue slipped 0.3% year-over-year to KRW2.98 trillion; operating expenses were down 1.9% to KRW2.96 trillion, producing an operating profit of KRW20 billion, reversing an operating loss of KRW30 billion reported in the fourth quarter of 2012.
Korean Air’s full-year international traffic fell 0.4% to 65.9 billion RPKs; capacity grew 1.3% to 85.6 billion ASKs, producing a load factor of 77%, down 1.3 points year-over-year. Yield for Korean Air’s international passengers fell 2.1% year-over-year to $0.093. Cargo demand fell 5.7% year-over-year to 7.8 billion FTKs; cargo capacity decreased 6.4% to 10.1 billion AFTKs, resulting in a cargo load factor of 77% for 2013, a 0.6 point increase year-over-year.
5 February 2014
Krohn Air files for bankruptcy
News reports state that the Norwegian regional airline ceased its flights and filed for bankruptcy.
Krohn Air is a virtual regional airline. It was founded in 2002 in response to the setting of flights into smaller Norwegian cities by SAS. With a leased BAe Jetstream 32 she was still flying at the end of three destinations in their home country. They served the goals Alesund, Molde and Trondheim. But on Tuesday (February 4) presented a Krohn Air all their flights. At the same time the company filed for bankruptcy. The aircraft had the Dutch AIS provided that wants to expand into Germany.
** Under IPP's policies cover is excluded for this airine for tickets and policies issued on or afer 4th February 2014.
5 February 2014
Bahrain Air on the verge of bankruptcy.
News reports state that Bahrain Air on the verge of bankruptcy. Hundreds of Bahrain Air staff who lost their jobs when the airline went into voluntary liquidation are unlikely to receive severance packages with the company allegedly about to file for bankruptcy.
Millions of dinars owned to companies will also have to be written off as the carrier changes its legal status, said a report in the Gulf Daily News (GDN), our sister publication.
The revelations come almost a year after the airline went into voluntary liquidation, with the loss of 345 jobs.
Numerous lawsuits were earlier filed against the carrier by disgruntled employees and it is understood it owes companies at least BD4 million ($10.5 million).
A lawyer arguing on behalf of former Bahrain Air staff told the GDN the courts had already informed people with cases against the airline that it will file for bankruptcy within weeks.
"The airline is filing for bankruptcy on February 19 which means that all the 75 individuals (who have cases pending) and any companies with cases against it will get nothing," he said.
"Because they are filing for bankruptcy in February then all those cases in which verdicts were due in March will be useless.
"By filing for bankruptcy they don't have to pay anyone anything and instead the burden of distributing the assets will be on the court and that includes the millions they owe to companies too."
One former Bahrain Air employee, who is among those taking legal action against the airline, said many of those who lost their jobs were still struggling to make ends meet.
"The airline is filing for bankruptcy and we are all worried that we will get nothing once that happens," he said.
4 February 2014
Ryanair loss
News reports state that Low-cost carrier (LCC) Ryanair slipped into the red in the fiscal third quarter, registering a €35.2 million ($47.3 million) loss compared to an €18.1 million profit a year previously.
Revenue was up fractionally at €969 million, compared to €964 million for the year-ago period.
The Irish LCC said losses were in line with its previous guidance and due entirely to lower fares and a weakness in the sterling. Anticipated full-year profit outlook remains steady at around €510 million.
31 January 2014
South African Airways still heavily in the red despite less losses
News reports state that South African Airways (SAA) reduced its losses for the 2012-13 financial year, but remains heavily in the red.
SAA announced a pre-tax loss of R1.2 billion ($107 million) at its annual general meeting, compared to R1.4 billion last time. Net profit/loss figures were not released. Revenue in “a challenging and competitive environment” was up 14% at R27.1 billion, compared to R23.9 billion for the previous year.
The revenue improvement was attributed to several factors—including a 7% increase in fares, an 8% increase in passengers on traditionally profitable domestic routes, and a 3% increase in capacity.
Among several negative factors, fuel costs and a 13% weakening of the South African rand against the dollar had a severe impact on operating costs, which rose 12% year-on-year, SAA said. Fuel costs had the greatest impact on long-haul routes where the existing fleet was fuel inefficient.
The weaker South African currency offset savings of more than R1 billion made through the airline’s cost compression program. For example, maintenance costs—mostly tied up in ongoing contracts and affected by currency fluctuations—were up 33%, from R1.7 billion to R2.3 billion. Aircraft lease costs increased 17% from R1.8 billion to R2.1 billion
Employee costs increased 3% to R4.8 billion. Management did not receive any salary increase for the year, while pilots received 7.2% and general staff, 6.1%. Headcount was up 4%, primarily due to conversion of contract workers to permanent staff.
28 January 2014
Tiger Airways goes into the red
News reports state that Singapore-based no-frills carrier Tigerair reported a loss after tax of SGD118.5 million ($93 million) for the third quarter ended Dec. 31 2013, compared to a profit after tax of SGD2 million in the year-ago quarter.
The airline group - which comprises Tigerair Singapore, Tigerair Mandala, Tigerair Philippines and Tigerair Australia - said the disappointing result was largely attributable to SGD88.3 million of exceptional charges that included a SGD30.3 million loss on the planned disposal of Tigerair Philippines and an impairment of associates of SGD58 million in the quarter. The group also recorded SGD23.1 million as its share of losses of associates.
Operationally, revenue declined 30.5% in the third quarter to SGD172.1 million from SGD246.7 million during the same period in the previous year. Tigerair said this was mainly due to “the exclusion of Tigerair Australia which ceased to be a subsidiary” following the sale of a 60% stake to Virgin Australia in July last year. Total expenses fell 21.3% to SGD180.9 million from SGD229.8 million year-on-year for largely the same reason.
Overall, the group reported a Q3 operating loss of SGD8.8 million, compared with an operating profit of SGD17.9 million during the year-ago period.
Group CEO Koay Peng Yen said, “Our third quarter operating performance was dragged down by industry overcapacity which had led to weaker yields and lower load factors. We recorded exceptional charges on losses from associates. Consequently the disposal of Tigerair Philippines will put us on a better footing going forward. We continue to address these challenges even as the macro environment remains difficult.”
As far as the outlook is concerned, the company said that Tigerair Singapore “continues to face near-term pressure on yield and load factors in the current seasonally quiet quarter amid an overcapacity situation in the industry.”
24 January 2014
Tiger airways loss
News reports state that ThE sale of Tigerair Australia to Virgin Australia has been cited by Tiger Airways Holdings for a 30% decline in revenue for the group during Q3 for the 2014 FY.
Tigerair reported a loss after tax for the quarter ending 31 Dec of S$118.5m (AU$105m), which compares to a profit of S$2m (AU$1.8m) 12 months ago.
The group incurred “exceptional charges” of AU$78.8m, which consisted of a AU$27m hit after offloading Tigerair Philippines, and “impairment of associates” charges of AU$51m.
Share of loss from Tigerair Aus amounted to AU$6.6m in
9 January 2014
Qantas downgraded to Junk status again
News reports state that Qantas faces a further increase in the cost of new borrowings after the second of the big two credit ratings agencies downgraded it to junk status, citing a ''sharp deterioration'' in its key domestic business due to stiff competition from Virgin Australia.
A month after Standard & Poor's cut the airline to junk, Qantas suffered further ignominy on Thursday when Moody's downgraded the airline two notches to Ba2, from Baa3, with a negative outlook.
A two-notch downgrade is uncommon, and leaves US carrier Southwest and Air New Zealand as the only airlines Moody's rates investment grade.
It follows Moody's putting Qantas on review last month after the airline warned it would post a first-half loss of up to $300 million and axe at least 1000 jobs.
21 December 2013
Haiti Aviation suspends operations
Haiti Aviation, the Haitian-operated airline that distinguished itself from the competition by busing customers to their final destination after their arrival, has had its wings clipped.
Flights were abruptly suspended Thursday, stranding passengers in Port-au-Prince, Haiti and in Miami.
Falcon Air, which had been leasing a 150-seat aircraft and six crew members to Haiti Aviation for thrice-weekly flights between Miami and Port-au-Prince told the airline Wednesday night that it would no longer provide the plane and crew.
When Nelson Ramiz Jr., the general manager of Falcon said the plane would no longer be showing up at the gate, “I thought it was a game,’’ said Charles Voigt, Haiti Aviation founder.
But the financial dispute between Voigt and Ramiz is quite real.
16 December 2013
Brindabella Airlines put into receivership
News reports state that Brindabella Airlines' 140 employees, including 70 in Canberra, have been temporarily stood down after the company was put into receivership.
Staff did not comment on the decision as they left a meeting at Brindabella Airlines' offices on Monday morning, with some embracing and bursting into tears.
Receiver Sebastian Hans said the reaction from staff had been "a mix of high emotion and sadness" but that this suspension would be a matter of days, not weeks.
16 December 2013
Danube Wings suspends all operations
News reports state that DanubeWings (V5, Bratislava) has reportedly suspended all its operations until further notice. According to AustrianWings, the Slovak carrier has not operated any actual revenue flights, scheduled or charter, since November 20, with all staff having now been laid off. The airline's fleet of three ATR72-200s will also be put up for sale. Parent VR Jet (VRJ, Bratislava) has not been affected by Danube Wings' termination of operations.
16 December 2013
Link Air files for bankruptcy
News reports state that LINK Airs (Fukuoka) has filed for voluntary bankruptcy and will now be liquidated. Its reported that the start-up failed to raise adequate capital for its operations.
10 December 2013
American Airlines emerges from Chapter 11
News reports state that American Airlines parent AMR Corp. has emerged from Chapter 11 bankruptcy protection and completed its merger with US Airways; the companies officially formed the new American Airlines Group Inc. on Monday morning.
The airlines had been planning to close their merger in the 2013 third quarter, but a surprise antitrust lawsuit filed by the US Department of Justice (DOJ) in August sought to block the formation of the world’s largest airline and temporarily delayed the combination’s closing. However, a settlement between the airlines and DOJ last month paved the way for the merger’s completion.
6 December 2013
Qantas financial rating lowered to Junk Status by S&P
News reports state that Qantas, the Australian airline, has had its credit rating downgraded to "junk" - below-investment - level, by the ratings agency Standard & Poor's (S&P).
The downgrade could increase the airline's borrowing costs and sends a warning to investors.
The move by S&P comes after the airline issued a surprise profit warning and announced 1,000 job cuts on Thursday.
The carrier expects to make losses of up to A$300m ($271m; £165m) in the July-to-December period.
S&P said the rating cut reflected its view "that intense competition in the airline industry has weakened Qantas' business risk profile to fair from satisfactory, and financial risk profile to significant from intermediate."
It lowered the carrier's rating from the lowest investment grade, BBB-, to BB+.
5 December 2013
Qantas reports expected losses and need for action
News reports state that Qantas Airways Ltd. (QAN), Australia’s largest carrier, flagged a record first-half loss and 1,000 job cuts, sending its shares down the most in 18 months.
Rising fuel costs and a drop in domestic ticket prices will drive losses of between A$250 million ($226 million) and A$300 million before tax and one-time items in the six months ending Dec. 30, the Sydney-based company said in a regulatory statement today. The airline is aiming for A$2 billion of cost savings over the next three years.
The forecast prompted Moody’s Investors Service to place Qantas’s credit rating on review for a possible downgrade, underscoring the challenges Chief Executive Officer Alan Joyce faces amid a market share fight with second-ranked Virgin Australia Holdings Ltd. (VAH) A first-half loss may leave Qantas shareholders sitting on aggregate net losses over the five years since Joyce took over, compared with A$3.31 billion of profits posted in the previous five years.
25 November 2013
Belle Air ceases operations
News reports state that Albanian carrier Belle Air has ceased operations "due to the general economic situation, the decline of the purchasing power, recession in the markets it operates as well as from the freezing for over 18 days of its bank accounts".
The airline, which served airports including London's Stansted from its base at Tirana International, said that it would now "start a process of restructuring aiming to return with lower prices and quality service in the Albanian market".
It added that it would invite Albanian and foreign investors "to be part of the revival of this success story of an Albanian born business".
The news leaves just British Airways offering direct, non-stop flights between London and Tirana, with a three times-weekly service operating from London Gatwick.
Belle Air said that customers holding a valid ticket would be able to purchase "a new ticket at a special adjusted price" from Italian carrier Blue Express.
19 November 2013
Malaysia Airlines reports $115.3 million losses
News reports state that Malaysia Airlines reported a third-quarter net loss of MRY375 million ($115.3 million), reversed from a net profit of MRY37.1 million in the 2012 September quarter.
The Kuala Lumpur-based carrier said the loss was “attributed to increased competition impacting yields, higher expenses affected by the weakening of the Ringgit against the US dollar, increased charges at overseas airports, including higher overflying charges, an intensive advertising program … and increased finance costs.”
8 November 2013
SpiceJet worst historical loss
News reports state that Low-cost carrier SpiceJet today reported a record loss of Rs 559 crore in the three months to September, hit by high fuel prices and a weak rupee.
The airline, controlled by media baron Kalanithi Maran's Sun Group, had reported a loss of Rs 164 crore in the year-ago period.
The airline's previous biggest loss was Rs 327 crore in the September quarter of FY 2007-08.
The airline, which has been headless since late July after CEO Niel Mills quit, in a late night media statement said its income rose marginally to Rs 1,246.08 crore from Rs 1,172.97 crore in the year-ago period.
The finance cost rose to Rs 32.72 crore during the July-September quarter from Rs 30.67 crore in the same period of last fiscal.
The airline attributed the record high loss to higher fuel prices, which accounted for 56 per cent of the total operational expenses, up from 54 per cent in the year-ago quarter.
A weakening rupee against the US dollar, coupled with a massive spike in aircraft maintenance cost that jumped to Rs 78 crore in the reporting period added to the airline's woes. The company said it did not pay any tax in the reporting quarter against Rs 6.3 crore it had paid in year-ago period.
8 November 2013
Republic Airways $13.8 Million 3rd quarter loss
News reports state that Republic Airways Holdings—parent of US carriers Chautauqua Airlines, Frontier Airlines, Republic Airlines and Shuttle America—has reported a third-quarter net loss of $13.8 million, reversed from a $25.8 million net income in the year-ago quarter.
1 November 2013
Lufthansa 9 months net profit down 64.6%
News reports state that Lufthansa Group reported a net profit of €247 million ($340 million) for the first nine months ended Sept. 30, down 64.6% from the year-ago period.
Group total revenue for the 9-month period was €22.8 billion, down 0.23% year-over-year. Operating profit was €661 million, down 27.1% from €907 million in the year-ago period. Adjusted operating profit was €859 million, up 48% from €582 million in Sept. 30, 2012. In a statement, the Lufthansa Group said the results were adjusted for restructuring and project costs and positive non-recurring effects.
1 November 2013
Air France KLM still in the red, profits down despite revenue up
News reports state that Air France-KLM reported a third-quarter net profit of €144 million ($195.7 million), down 51% on last year’s third-quarter figure of €296 million. However, chairman Alexandre de Juniac pointed to a growing operating profit of €634 million for the quarter, up 29% from €491 million year-over-year as the company continues to address its financial problems.
29 October 2013
Flynonstop Airlines files for Bankruptcy
News reports state that fledgling Norwegian carrier Flynonstop has ceased operations and filed for bankruptcy, just six months after its launch.
“We regret to announce that of today we have sent a petition for bankruptcy of Flynonstop AS. This means that all our flights as of Tuesday, 10/29/2013 at 06:00 have been canceled,” a statement on its website said Tuesday.
Kristiansand-based Flynonstop launched operations April 25, serving a range of European destinations including London City, Barcelona, Berlin, Nice, Palma, Paris and Parma. It operated an Embraer E-190 on lease from CIT Aerospace using the air operator’s certificate of Dutch carrier Denim Air.
“Unfortunately we at Flynonstop could no longer meet the company’s obligations. We therefore realize that we had to close down the operation,” the statement said.
24 October 2013
Jet Airways net losses soar 8 fold
News reports state that Jet Airways today blamed a steep fall in the rupee, slowdown in the domestic aviation market and rise in fuel costs for a sharp widening in standalone net loss at Rs 891 crore in the July-September quarter, 2013-14.
It had logged Rs 99.7 crore loss in the year-ago period.
Jet Airways Group operates more than 550 flights a day with its two brands, the full-service Jet Airways and the low-cost JetLite.
The consolidated losses were much higher at Rs 998.5 crore.
17 October 2013
FasJet reports a USD 42 Million net loss of first 6 months of 2013
News reports state that fastjet has reported a USD42 million net loss for the six months to 30-Jun-2013, but its directors remain upbeat about the fledgling African LCC’s prospects, with its Tanzanian domestic operations exceeding expectations and making a profit on an underlying route basis. But the directors acknowledge in the unaudited accounts that the carrier will need to raise further funds in the future “which represents a material uncertainty over going concern”.
fastjet’s ambition to establish Africa's first pan-African low-cost carrier is continuing to encounter strong headwinds. On its own admission, the Tanzanian market is too small to sustain the company and international expansion is critical to its longer term survival.
23 September 2013
Willie Walsh warns of more European Airlines to collapse
News reports state that Airline chief Willie Walsh has warned "a number" of European carriers are poised to fail.
Walsh, the chief executive of British Airways parent International Airlines Group (IAG), said: "Quite a number of airlines on the periphery of Europe continue to struggle.
"We are going to see a number of airlines in Europe go out of business.
"You will see a number of airlines struggle through this winter. There is little value in acquiring these companies, so the next phase of consolidation will be carriers going out of business."
Walsh declined to name any carriers, but said: "There are a lot of small airlines with very weak balance sheets and easyJet and Ryanair continue to apply pressure in short-haul markets."
12 September 2013
Dagestan Airlines in Bankruptcy
News reports state that the Arbitration Court of the Dagestan Republic has declared the bankruptcy of Dagestan Airlines, more than a year after Russian authorities withdrew the Makhachkala-based carrier’s air operator’s certificate at the end of 2011.
According to Russia’s Federal Air Transport Agency, Rosaviatsia, the decision was based on unsatisfactory safety performance and financial problems.
5 September 2013
Dutch Antilles Express is declared bankrupt
News reports state that Dutch Antilles Express (9H, Curacao) has been declared bankrupt by the Court of First Instance of Curaçao at the behest of the airline's employees, Zakenreisnieuws.nl has reported. In their submission, the employees argued that the airline declaring bankruptcy was the only way for them to recover any of the monies still owed to them after having gone for more than two months without being paid. The onset of DAE's financial woes first surfaced in May when USD20million in remittances was reportedly frozen in Venezuela after authorities there moved to block the airline from operating to the country citing alleged safety oversights.
30 August 2013
Air Australia reports full year loss of $98 Million
News reports state that Virgin revealed its full year results - a statutory loss of $98.1 million, compared to a $22.8m profit for the previous years.
The company cited a range of factors for the loss, including the difficult economic and competitive environment, significant one-off restructuring and transformation costs, and the government's carbon tax.
28 August 2013
Air Asia Group profits down 62%
News reports state that AirAsia Group reported second-quarter net income of MYR58.4 million ($18.5 million), down 62% from MYR153.1 million in the year-ago period. Revenue rose 5.5% to MYR1.3 billion, while expenses increased.1.9% to MYR1 billion, producing an operating profit of MYR243.9 million, up 23.5% from a MYR197.5 million operating profit in the prior-year quarter.
The company explained the net profit plunge was “due to unrealized impact of [MYR]/USD exchange rate movement.”
21 August 2013
Thai Airways losses more than quadruple of last year
News reports state that Thai Airways reports a second-quarter net loss of THB8.4 billion ($270.8 million), a performance that more than quintuples its THB1.5 billion net loss in the year-ago quarter.
Revenue fell 1.8% year-over-year to THB47.1 billion while expenses increased 1.1% to THB50 billion, producing an operating deficit of THB2.9 billion, nearly doubling the THB1.5 billion operating loss of the year-ago quarter.
12 August 2013
Jet Airways net loss $59.8 Million
News reports state that India’s Jet Airways posted a net loss of INR3.55 billion ($59.8 million) in the fiscal first quarter ended June 30, reversed from a profit of INR247 million in the year-ago quarter. Revenues fell 12.3% to INR40.64 billion compared to INR46.4 billion in the year-ago quarter.
Jet Airways’ loss for the second consecutive quarter was higher than analysts expected.
The carrier operates as two separate companies, Jet Airways and Jetlite.
Acting CEO Hameed Ali said the “devaluation of rupee versus US dollar, a steep increase in landing and navigation charges at key metros, and high fuel prices have impacted the industry’s profitability.’’
3 August 2013
Lufthansa reports net loss of €204 million
News reports that Lufthansa Group reported a first-half net loss of €204 million ($270.3 million), reversed from a net profit of €50 million in the prior-year period. Operating results were down 69.4% to €72 million from a €235 million profit in the year-ago period.
Lufthansa said the previous year’s results included “positive one-off effects from the restructuring of Austrian Airlines and the settlement of pension obligations at British Midland International (bmi) amounting to €325 million in total. Expenses in connection with the SCORE program also depressed earnings of the past six months further on a one-off basis.”
Lufthansa CFO Simone Menne said, “The restructuring of the Lufthansa Group is gaining speed. Without the one-off effects, the Group’s operating profit would have been higher than in the first half of last year,” he added.
First-half total revenue fell 0.3% to €14.46 billion, while operating expenses rose 1.1% to €15.5 billion, despite a 5.1% decrease in the number of flights in the passenger and freight business. Fuel costs declined 2.5% to €3.5 billion, largely due to lower volumes.
1 August 2013
Aer Lingus interim loss
News reports state that Aer Lingus reported an interim net loss of €2.5 million ($3.1 million) for the six months ended June 30, widening 400% from a €0.5 million loss in the year-ago period.
The results were impacted by a number of exceptional items, including defending against Ryanair’s takeover bid, pensions-related costs, restructuring charges and the launch of ACMI operations for Virgin Atlantic’s Little Red short-haul venture. Aer Lingus added that the first half is typically “seasonally loss-making.”
1 August 2013
Nippon Airways first quarter loss $67 million
News reports state that Japan’s All Nippon Airways posted a first-quarter fiscal net loss of ¥6.6 billion ($67 million), reversed from a net profit of ¥668 million in the year-ago quarter, ending June 30. First-quarter revenues were ¥358.3 billion, up 4.4% year-over-year, while expenses were up 9.6% to ¥363.9 billion, producing an operating loss of ¥5.6 billion, reversed from an ¥11 billion operating income in the first quarter 2012.
ANA Holdings said the primary reason for the increase in operating expenses was a rise in fuel costs due to the weakening of the yen. Operating revenues were also affected by the suspension of Boeing 787 services for part of the period.
25 July 2013
Tiger Air slips back into the red after further losses
News reports state that Tiger Airways Holdings slipped back into the red for the quarter ending 30-Jun-2013 (1QFY2014) as its affiliates in Australia, Indonesia and the Philippines were again unprofitable.
28 June 2013
Kenya Airways reports losses of USD92 Million
News reports state that Kenya Airways has shocked the market with a significantly worse than expected KES7.9 billion (USD92 million) loss after tax for the year ending 31-Mar-2013 (FY2013). The loss follows a FY2012 net profit of KES1.6 billion (USD18 million) and was driven by the effects of the European economic downturn and geopolitical uncertainty surrounding a number of general elections in Africa, which caused a significant drop in demand.
3 June 2013
Malaysian Airlines reports widened losses
News reports state that Malaysia Airlines reported a first-quarter net loss of MRY279 million ($91.9 million), widened from a net deficit of MRY172 million in the 2012 March quarter.
The Kuala Lumpur-based carrier said the increased loss “was mainly attributed to an unrealized [foreign exchange] loss of MRY21 million in Q1 2013 compared to a forex gain of MRY200 million in the previous year. Higher financing costs for its fleet renewal program also contributed to the overall net loss.”
CEO Ahmad Jauhari Yahya said in a statement, “The continued high jet fuel prices, added capacity in the market and increased competition put pressure on our yields. The business environment is tough.”
28 May 2013
Alitalia losses widen
News reports state that MILAN--Alitalia SpA on Monday reported a wider net loss for the first quarter as it kept burning through cash, highlighting the challenges faced by the industry and the Italian airline's new chief executive.
Alitalia, which got its shareholders to lend it as much as 150 million euros (about $195 million) to help keep it flying early this year, said in a statement its net loss reached 157 million euros ($203 million) from EUR131 million for the same period last year, citing non-recurring items. It didn't describe those items.
17 May 2013
Virgin Atlantic dives into deeper losses
News reports state that Virgin Atlantic has dived to a steeper annual loss - blaming tough economic conditions and the London 2012 Olympic Games.
The airline, founded by Sir Richard Branson, lost £93m in the year to the end of February, worse than the £80m loss it reported a year earlier.
Its group pre-tax loss was £69.9m after a one-off positive £35.4m exceptional item and £23.1m in other income was taken into account, it said.
Craig Kreeger was appointed in January
Revenue increased by 5% to £2.87bn as 5.5 million passengers flew with the airline, 188,000 higher than in 2011/12.
Chief executive Craig Kreeger said: "Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel."
European carriers such as IAG's Iberia, Lufthansa and Air France-KLM are slashing jobs and shelving growth plans as they grapple with high fuel prices, a weak economy and fierce competition from low-cost carriers and Middle East airlines.
17 May 2013
Air Berlin losses widen
News reports state that Air Berlin reported a first-quarter net loss of €196.3 million ($254.8 million), widened from a €163.6 million loss in the year-ago period. The airline said the results were due to one-off charges; however, its Turbine restructuring program is beginning to yield results.
“The figures and results of the first quarter of the current financial year are not satisfactory; however, they are in line with expectations. As a result of this burden, the Air Berlin Group’s equity turned negative as at the March 31 reporting date under IFRS reporting standards, even though net debt could be reduced,” Air Berlin CEO Wolfgang Prock-Schauer said in his message to shareholders in the airline’s interim report.
15 May 2013
GOL losses worsen
News reports state that Brazil’s GOL posted a first-quarter net loss of BRL75.3 million ($37.2 million), worsened from a net loss of BRL41.4 million in the year-ago quarter.
14 May 2013
Virgin America incurs widened losses
News reports state that Virgin America incurred a net loss of $145.4 million for the full year 2012, widened from a net deficit of $100.4 million in 2011, and followed those results up with a $46.4 million net loss in the 2013 first quarter.
13 May 2013
IAG (British Airways & Iberia) reports a sharp deterioration in 1st quarter results
News reports state that International Airlines Group (IAG), parent company of Iberia and British Airways, reported a sharp deterioration in its first-quarter results compared to the previous year, taking into account exceptional items.
IAG reported a post-tax loss of €630 million ($819 million), more than four times the loss of €129 million for the year-ago period. Revenue rose by 0.5% to €3.93 billion, while operating loss was slightly worse at €278 million compared to €249 million. However, the figures were dragged down by €311 million of exceptional items.
IAG CEO Willie Walsh said that much of the exceptional expenditure was incurred in the restructuring of heavily loss-making Iberia.
7 May 2013
Air France losses widen
News reports state that Air France-KLM Group reported a first-quarter negative net income of €630 million ($827.6 million), widened from a loss of €379 million in the year-ago period.
3 May 2013
Lufthansa Group increased net loss
News reports state that Lufthansa Group posted a first-quarter net loss of €459 million ($605.1 million), widened 16.5% from a net loss of €394 million in the year-ago period. The company cited expenses for severance pay and compensation as part of the SCORE job cuts, as well as impairment losses and valuation effects, for the results. Its full-year earnings outlook for the year remains unchanged.
2 May 2013
China Eastern Airlines 1st quarter loss
News reports state that China Eastern Airlines reported a first-quarter net loss of CNY132.4 million ($21.3 million), reversed from a net profit of CNY266.5 million in the year-ago period.
2 May 2013
Icelandair losses widen
News reports state that Icelandair reported a first-quarter net loss of $18.3 million, widened 38.6% from a $13.2 million loss in the year-ago period. However, the airline said the performance exceeded management projections.
26 April 2013
Grupo Aeromexico first quarter net loss
News reports state that Grupo Aeroméxico has reported a first-quarter net loss of MXN122 million ($9.9 million), reversed from a net profit of MXN$135 million last year.
Revenues increased 0.4% to MXN9.17 billion despite a 3% decrease in CASKs excluding fuel to MXN0.76. Operating expenses grew 2.3% to MXN8.98 billion and Grupo Aeroméxico achieved an operating profit of MXN$189 million, down 47.8% year-over-year.
Expenses increased by MXN$16 million year-over-year to MXN$261 million, while Aeroméxico faced “a MXN$59 million negative impact” due to “the reduced market value of the company’s fuel hedging position,” the company said.
26 April 2013
United Continental Holdings US$417 million first quarter loss
News reports state that United Continental Holdings, parent of United Airlines, has posted a first-quarter net loss of $417 million, including $92 million of special charges, compared with a 2012 first-quarter net loss of$448 million.
26 April 2013
Aer Lingus losses widen
News reports state that Aer Lingus recorded a slightly worsened first-quarter loss compared to the previous year and the carrier said it would be reinforcing cost-cutting measures in response.
The Irish airline reported an operating loss of €45.5 million ($59.1 million) compared to a €36.1 million operating deficit in the year-ago period. It does not release net profit figures in its quarterly reports.
23 April 2013
Air Canada 1st quarter net loss of $253.4 million
News reports state that Air Canada estimated it will incur a net loss of C$260 million ($253.4 million) for the first quarter, slightly narrowed from a net deficit of C$274 million in the 2012 first quarter, in preliminary results released Monday.
The airline will release its full first-quarter results May 3. Operating loss for the March quarter is expected to be C$106 million, widened from an operating deficit of C$91 million in the year-ago period.
Air Canada said its first-quarter results “were negatively impacted by an estimated C$10 million due to flight cancellations caused by severe weather conditions and operational challenges at the airline’s major Canadian airport hubs, as well as aircraft deicing service delays at Toronto Pearson International Airport.” An unfavorable foreign currency impact on passenger revenue contributed to the operating loss, it added.
30 March 2013
Aegean reports $ 10.5 million loss
News reports state that Net losses were €10.5 million ($13.5 million) compared to €27.2m in 2011. Revenue was €653.4 million, 2% lower on 2011’s figure of €668 million.
International traffic presented a more mixed picture, with traffic to and from Athens declining by 6% while passenger numbers serving the nation’s regional airports rising 10%. Tourism is vitally important to the Greek economy and Aegean reported that its close focus on inbound leisure passengers resulted in improved performance on its international routes.
29 March 2013
Armavia files for bankruptcy
News reports state that Armenian businessmen Mikayel Baghdasarov’s Armavia, the country’s only carrier, declared bankruptcy today and will cease flights starting April 1.
The company founded in 1996 was unable to pay debt accumulated to the Zvartnots airport in Yerevan, Armenia’s capital, and to its contractors, Armavia said in an e-mailed statement today. The total debt was less than $50 million, Baghdasarov told the Arminfo news service on March 15.
28 March 2013
GOL reports a full year loss of $787 Million
News reports state that Brazil’s GOL has reported a 2012 full-year net loss of BRL1.58 billion ($787 million), widened 58.4% from a BRL1 billion net loss in 2011. Fourth-quarter net loss was BRL$447.1 million, reversed from a net profit of BRL54.3 million in the year-ago period.
26 March 2013
Estonia Losses widen for 2012
News reports state that Estonia Air losses widen in 2012
Baltic flag-carrier Estonian Air widened its deficit in 2012, with net losses reaching €49.2 million ($63.8 million), widened from a €17.3 million net loss in 2011. Revenue was €91.5 million, up from €76.1 million in the year-ago period.
Much of the loss was a result of the airline’s previous growth and route expansion policies, which accounted for some €26 million in costs, the company said.
13 March 2013
Cathy Pacific profits drop 83%
News reports state that Cathay Pacific Airways, the Hong Kong-based airline, said its net profit dropped 83 per cent in 2012 as cargo shipments from mainland China were weak and the airline was buffeted by higher fuel costs.
9 March 2013
Cyprus Airlines loss widens
News reports state that Cyprus Airways reported a provisional full-year net loss of €55.8 million ($72.7 million) for 2012, more than doubling its €23.9 million loss in the year-ago period. The company issued a stark warning that its future hangs on the success of its restructuring plan.
6 March 2013
B H Airlines grounded
News reports state that Bosnia's BH Airlines has been grounded and faces possible bankruptcy over an outstanding bank debt, a senior government official said on Tuesday.
The Sarajevo-based carrier is solely owned by Bosnia's autonomous Muslim-Croat Federation, after Turkish Airlines pulled out of a joint venture in June last year and handed its 49-percent stake over to the government.
Enver Bijedic, the Federation's minister for transport and communications, told Reuters that flights had been halted due to claims of some 7 million Bosnian marka ($4.6 million) by the Bosnian arm of Austria's Hypo Alpe Adria Bank.
Last month the bank froze the airline's accounts over an unpaid 5.5 million marka leasing loan for two ATR 72 aircraft and a 1.5 million marka rehabilitation loan. Bijedic said BH Airlines had deposited collateral of roughly the same amount with the bank.
The bank confirmed in a statement that it had frozen the accounts of BH Airlines because of significant outstanding debt and delays in the payment of the leasing loan.
** Under IPP's policies cover is excluded for tickets and or policies issued from 5th March 2013.
3 March 2013
Skywest Airlines net half year loss S$2.2 million
News reports state that Perth-based Skywest Airlines reported a consolidated net loss after tax of S$2.2 million ($1.8 million) for the half-year ended Dec. 31, 2012, reversed from a S$4.5 million profit for the year-ago period. The airline said the results were due to challenging conditions putting downward pressure on loads and yields, as well as several non-recurring costs, including the carbon tax implemented on July 1, 2012 (S$2 million pre-tax).
1 March 2013
Virgin Australia profits down 56%
News reports state that Virgin Australia reported first-half FY2012/13 net profit was A$23 million ($23.5 million), down 56% from A$51.8 million year-over-year. The airline’s fiscal year 2012/13 first half ended Dec. 31, 2012.
Underlying profit before tax was A$61 million, down 36.5% from A$96.1 million in the year-ago period.
Virgin Australia CEO John Borghetti said the business was impacted “by the introduction of the carbon tax, the cost of which we were unable to recover due to aggressive competition in the market.” The tax cost A$24.4 million.
28 February 2013
British Airways & parent IAG report a full year net loss of €943 million
News reports state that British Airways and Iberia parent International Airlines Group (IAG) reported a full-year net loss of €943 million, down from a €503 net profit in the year-ago period. The airline said the results were depressed by Iberia’s deteriorated performance and the integration of British Midland International (bmi).
22 February 2013
Air France KLM loss widens to €1.19bn
News reports state that Air France-KLM said the widening of its full year net loss to €1.19bn in 2012 from €809m in 2011 was in line with its expectations.
The airline attributed the decline to a €471m restructuring charge and a €890m increase in its fuel bill.
20 February 2013
Lufthansa profits slump 36%
News reports state that Lufthansa suffered a 36% slump in operating profits last year and plans to suspend dividend payments.
20 February 2013
Chinese carriers report a net loss of $158.9 million
News reports state that Chinese carriers reported a net loss of CNY1 billion ($158.9 million) in January, reversed from a net profit of CNY1.7 billion in the year-ago period.
12 February 2013
Bahrain Air files for bankruptcy
News reports state that Bahrain Air through their website have stated today:-
"Statement from the Board of Directors of Bahrain Air
Bahrain Air held an Extraordinary General Meeting today at which the shareholders made the decision to announce the company’s immediate suspension of operations and to file for voluntary liquidation in accordance with the Kingdom of Bahrain's Commercial Companies Law.
The company sustained considerable financial losses as a result of the unstable political and security situation in Bahrain. In 2011, during Bahrain’s State of National Emergency, the airline was instructed to suspend flights to several destinations, and also suffered from the lack of traffic to and from Bahrain, and from the restrictions on the Saudi Causeway. Despite the Royal Decree number 18 for 2011 Article 5/10 regulating land, sea and air transportation during Bahrain’s State of National safety which states that all affected parties will be fairly compensated, the airline, despite making official claims, has received no compensation."
** As per the terms of IPP's policies cover will not be available for policies or tickets issued from 12th February 2013
7 February 2013
Aer Lingus profits down 52%
New reports state that Aer Lingus reported a 2012 net profit of €34.1 million ($46.1 million), down 52% from €71.2 million in 2011.
The Irish flag carrier said the results were affected by €26.5 million of exceptional items and that operating profit before exceptionals was up 40.7% at €69.1 million. Those exceptional items include the costs of defending itself against Ryanair’s third attempt to take over the airline.
31 January 2013
Batavia Air files for bankruptcy
News reports state that JAKARTA, Indonesia -- Indonesia's commercial court has declared budget carrier Batavia Air bankrupt just months after AirAsia, Southeast Asia's top low-cost airline, aborted a deal to invest in it, officials said Thursday.
Agus Iskandar, presiding judge at the Jakarta Commercial Court, said a bankruptcy petition filed by U.S.-based International Lease Finance Corporation was approved on Wednesday after Batavia Air failed to pay a $4.7 million debt that was due Dec. 13. Flights abruptly stopped just after midnight, stranding hundreds of passengers across the country.
30 January 2013
Air Malta loss
News reports state that Air Malta has posted a third-quarter net loss of €8.5 million ($11.4 million), narrowed from a loss of €11.9 million in the year-ago quarter. The airline’s third quarter ended Dec. 31, 2012.
Air Malta, which is going through a major restructuring process, said that many of the restructuring costs were one-off charges.
28 January 2013
OLT Express Germany ceases operations
News reports state that OLT Express Germany ceased operations Jan. 27 after owner Panta Holdings B.V would not agree to support a restructuring program.
OLT Express Germany said management and its 450 employees had agreed to a 25% cut in salaries to continue operations; it also had agreements in place with creditors.
In December 2012, the carrier announced plans to temporarily suspend 12 routes from German regional airports from early January. It attributed the route changes to high fuel prices and expectations it could not meet its year-end forecast.
A spokesperson said more information would be released in the near future.
The carrier was purchased by Dutch financial investor Panta Holdings last summer after Polish-based Amber Gold sold its investment.
The carrier operated a fleet of Fokker 100s, Saab 2000s and a Saab 340A.
** Under the terms of IPP's policies cover is excluded for tickets and policies issued after 27 January 2013.
4 January 2013
Aerosvit Airlines ceases tradings and files for insolvency
News reports state that Aerosvit Airlines (VV, Kiev Borispol (KBP)) has according to Kiev Borispol Airport ceased their operation at noon today. Flight VV257 which left for Copenhagen was the last Aerosvit Airlines flight before they stopped their operation. According to ukranian newspaper delo.ua the airline has also filed for bankruptcy on December 29 at the industrial court in Kiev. The carrier owned by Ukranian oligarch Ihor Kolomojskyj and his Privat Bank Group already had been in financial difficulties for some time accumulating approximately €420 million EUR in debt. The court has appointed Leonid Talan as the Airlines Insolvency Administrator. Aerosvit Airlines had operated a fleet of 31 aircrafts (28 active, 3 stored) with an average age of 17.1 years.
17 December 2012
IndiGo Airlines posts a $17 Million loss
News reports state that India’s IndiGo Airlines posted a loss of $17 million in its 2011-2012 financial year, according to a report in Business Standard, quoting an Indian Parliament statement. The carrier’s operating expenses were $1.12 billion on operating revenues of $1.1 billion.
13 December 2012
SAS $450 Million full year loss
News reports state that Struggling Scandinavian airline SAS AB, which last month announced an aggressive cost-cutting plan in a final desperate attempt to avoid bankruptcy, has reported a 3 billion kronor ($450 million) full-year loss.
Wednesday's results were largely weighed down by one-time costs linked to its new restructuring program and compared with a previous annual loss of 147 million kronor.
SAS has changed its financial year to November to October to better correspond with its internal procedures.
The Stockholm-headquartered group, which hopes to save 3 billion kronor a year through the cost cuts and raise the same amount through the sale of assets, says it expects to report a pretax profit in its current financial year.
It warned however, that the first quarter is looking "extremely weak."
11 December 2012
Kuban Airlines to ceases operations
News reports state that Russia’s Krasnodar-based Kuban Airlines will cease operations Dec. 11 due to financial difficulties. Also, the airline said it could not meet new requirements that took effect last month requiring Russian airlines using aircraft with larger than 55 seats to have at least eight aircraft of the same type.
At the beginning of last month, Kuban stopped using its Soviet-built fleet. The carrier had to return three Airbus A319s to its lessors due to its inability to pay.
In 2011, Kuban Airlines carried nearly 900,000 passengers. Last year, the airline merged with Sky Express—the first low-cost carrier in Russia. Both airlines belonged to investment company Basic Element.
** Under the terms of IPP's policies cover is excluded in respect of this airline for all policies or tickets issued with immediate effect.
27 November 2012
WebJet to close down
News reports state that Brazilian low cost carrier GOL is closing down its Webjet subsidiary, returning all 20 of the carrier’s Boeing 737-300s and laying off 850 employees.
Announcing the closure Friday, GOL said, “Webjet has an operational model based on a fleet that mostly consists of aging Boeing 737-300 aircraft that are advanced age, technologically out of date and consume large amounts of fuel. Given the Brazilian sector’s new cost standards, this model is no longer competitive.
27 November 2012
Aegean Airlines €8.7 million loss
News reports state that Greek carrier Aegean Airlines (A3) reported after-tax losses of €8.7 million ($11.3 million) for the first nine months, deepened from a €2.72 million loss in the year-ago period. Revenue was €511.3 million, down 5% year-over-year.
The airline blamed high oil prices and the strength of the US dollar against the euro, as well as persistent weakness in domestic demand.
20 November 2012
Virgin Australia turbulent times ahead
News reports state that Virgin Australia has warned that trading conditions for this financial year remain uncertain as economic troubles overseas weigh on the minds of Australian consumers.
Australia's second-largest airline has also expanded its code-share alliance with Singapore Airlines to cover more destinations in Australia, Asia and Europe.
Virgin has not issued specific earnings guidance but told shareholders at its annual meeting in Brisbane on Tuesday that it expects the negative consumer sentiment to persist over the short to medium term.
20 November 2012
Jetlink Express suspends operations
News reports state that Kenyan carrier Jetlink Express (J0) suspended all scheduled flights Nov. 16 after its creditors cut off funding.
In a statement, J0 said it has over $2 million in revenues in South Sudan, mainly in Sudanese pounds, although is unable to access this cash because of a scarcity of foreign currency in South Sudan. The airline’s credit lines in Kenya were based on these revenues.
“Unfortunately, our Kenyan bankers have recently advised us that they will no longer be able to grant us any further accommodation against our increasing deposited sales in Sudan citing currency and cross-border risk considerations,” J0 CEO Elly Aluvale said in a statement. “This has left us in a situation where we are unable to meet our short-term obligations as they fall due, particularly our fuel bill which constitutes close to 40% of our operating costs.”
** As per the terms of IPP's policies cover is excluded with immediate effect in respect of tickets and or policies issued from 16th November 2012
20 November 2012
Virgin America posts a third quarter net loss
News reports state that Virgin America (VX) posted a third-quarter net loss of $12.6 million, widened from a $3.3 million net loss in the year-ago quarter.
19 November 2012
GOL reports a third quarter net loss of $149.6 Million
News reports state that Brazil’s GOL has reported a third-quarter net loss of R$309.4 million ($149.6 million). The airline cited a 20% fuel increase, a new exchange rate level, an increase in airport fees and a slow pace of economy growth in Brazilas the main causes for the loss.
16 November 2012
Air Malawi goes into liquidation
News reports state that Malawi - Malawi has placed its debt-ridden national airline Air Malawi in voluntary liquidation after two previous restructuring attempts failed, the government said on Friday.
** As per the terms of IPP's policies cover is excluded for all tickets issued and or policies issued on or after this date.
9 November 2012
Kenya Airways half year loss of KES 6.6 billion
News reports state that Kenya Airways (KQ) reported first-half revenue of KES49.8 billion ($571 million), down 9.35% from KES54.9 billion in the year-ago period, resulting in a first-half pre-tax loss of KES6.6 billion. This was a sharp drop (333.2%) from the KES2.8 billion profit recorded in the same period last year.
The airline said the results were due to weak passenger demand, depressed yields, high oil prices and unfavorable exchange rates.
KQ chairman Evanson Mwaniki said the six months to Sept. 30 has been “very challenging” with “economic and geopolitical adversities” impacting the business environment. He said the economic downturn in Europe and high fuel prices had hit passenger traffic, as had travel advisories that negatively impacted the Kenyan market in the wake of tourism security breaches.
In the first half, KQ recorded an operating loss of KES5.5 billion, reversed from an operating profit of KES1.0 billion in the year-ago period. RPKs were down 3% across the network, with passenger revenues down to KES43.6 billion from KES48.6 billion year-over-year. Weak demand coupled with increased competition forced passenger yields down 2.6% over the year-ago period.
9 November 2012
Estonian Air €20.2 million 9 month loss
News reports state that Baltic’s state-owned Estonian Air (OV) reported a nine-month loss of €20.2 million ($25.9 million), nearly doubled from €11.2 million in the year-ago period.
3 November 2012
1 Time Airlines files for liquidation
News reports state that South African budget airline 1time Holdings said on Friday it had filed for liquidation and cancelled its flights, after pulling the plug on a rescue plan.
The airline, which operated flights within South Africa, said in August it had launched a turnaround plan to right its money-losing business.
"At the board meeting held today... it was recognised and agreed that the business had no reasonable prospect of being rescued," the company said in a statement to the stock exchange.
Trading in its shares - which have lost 87 percent of their value this year - would be halted, the company said.
Local media reported that hundreds of passengers were left stranded after the airline cancelled all its flights at 3:00 p.m. (1300 GMT).
The money-losing airline had 16 million rand ($1.85 million)in long-term debt on its balance sheet as of the end of December, according to Thomson Reuters data.
Its total liabilities at the time came to 536 million rand.
1 November 2012
Air France reports an increase loss of 74% from last year
News reports state that Air France-KLM (AF-KLM) reported a nine-month net loss of €957 million ($1.2 billion), widened 74% against a €550 million loss for the comparable period in 2011, due primarily to restructuring charges.
The Franco-Dutch carrier group blamed a €536 million hit in non-current and non-cash charges for the sharp decline in net profits, including a €348 million charge for voluntary redundancies.
AF-KLM is in the process of changing its year end from March 31 to Dec. 31, so there is no direct comparison for its third-quarter results. The group provided pro forma figures for the nine-month period.
18 October 2012
American Airlines parent AMR 3 Quarter loss $238 Million
News reports state that American Airlines (AA) parent AMR Corp. incurred a third-quarter net loss of $238 million, widened 46.8% from a $162 million net deficit in the year-ago period.
The airline pointed out that costs associated with its Chapter 11 bankruptcy restructuring were the main driver of the loss. It would have posted a $110 million net profit absent the special charges, which include $211 million in costs primarily associated with employee severance.
In releasing its earnings, AA attempted to paint a brighter picture of its current state compared to the serious operational and labor problems it has experienced recently. “These results were driven by the best unit revenue growth in the industry in each month of the quarter and by record load factor,” chairman and CEO Tom Horton said in a statement. In a letter to AA workers, he added, “Importantly, we saw unit revenue increases across all five of our hubs and across all international regions, reflecting the growing strength of our enhanced network and alliance partnerships.”
3 October 2012
UTair group's profits drop 63%
News reports state that Russia’s UTair Group, which includes UTair airline (UT), reported a first-half profit of $8.73 million, down 63% from a $23.6 million profit in the year-ago period. Revenue rose 32.5% to $989.8 million while expenses increased 31% to $941.2 million.
1 October 2012
Europe's airlines set to record bigger losses
News reports state that Europe’s airlines are set to record a bigger than expected $1.2bn net loss this year, partly because the number of passengers travelling in first or business class is declining, the industry’s trade body said on Monday.
The International Air Transport Association raised its industry forecast for 2012, saying carriers across the world should record a combined net profit of $4.1bn, up from a previous estimate of $3bn, because some airlines are increasing fares.
But Iata warned that Europe’s airlines were still suffering
from the effects of the eurozone sovereign debt crisis, and it increased their expected net loss in 2012 from $1.1bn to $1.2bn.
“The eurozone crisis is continuing despite the best efforts of politicians,” said Tony Tyler,
IATA’s director-general. “Not only is the economy weak . . . Europe has some very
unfriendly conditions for doing [aviation] business – onerous regulations, high taxes . . .
and an air traffic management system badly in need of modernisation.”
Leading European airlines such as International Airlines Group and Lufthansa rely on their long-haul operations – notably over the north Atlantic – for much of their
earnings.
But Iata highlighted how in July, the number of passengers travelling first or business class over the north Atlantic fell by 2.4 per cent compared with the same period last year.
26 September 2012
Virgin America reports 2nd Quarter net loss of $31.8 Million
News reports state that Virgin America (VX) reported a second-quarter net loss of $31.8 million, widened from a $21.7 million loss in the year-ago period.
Second-quarter revenue rose 29% to $347 million. Operating expenses increased 28% to $351.4 million, producing an operating loss of $4 million, narrowed from a $6 million loss in the year-ago quarter. As of June 30, VX hedged 58% of its expected fuel consumption for the rest of 2012.
EBITDAR rose 44% for the second quarter to $54.3 million from $37.6 million in 2011.
6 September 2012
Aeroflot Group profits down 98%
News reports state that Russia’s Aeroflot Group reported a first-half net profit of $7.1 million, down 98% from a $376.8 million profit in the year-ago period.
Operating revenue rose 54% to $3.6 billion while operating costs rose 64.4% to $3.5 billion. Traffic revenue increased 64% to $3.2 billion.
The Aeroflot Group includes Aeroflot Airlines (SU) and four regional carriers—Rossiya, SAT Airlines, OrenAir and Vladivostok Avia—that merged last year. Russian state corporation Rostechnology had originally transferred five carriers to SU, but after the deal it sold Saratov-based Saravia Airlines.
The group said the results were due to the consolidation of the all members’ financial results. SU representatives added that the integration is not complete. SU has reported it will create a special structure to monitor and coordinate the financial and operational performance of all group participants.
1 September 2012
Aegean first half loss of $48.3 million
News reports state that Aegean Airlines (A3) has reported a first-half net loss of €38.5 million ($48.3 million), widened 94% from a €19.8 million loss in the 2011 first half.
First-half revenue was €269.4 million, a 9% drop over the same period last year.
The airline said political uncertainty deterred international visitors from traveling to Greece—particularly to Athens—during the period of two consecutive elections, while the worsening economic crisis contributed to a decline in domestic demand. High oil prices and the weakened euro against the US dollar made the situation worse.
31 August 2012
Tough second half of the year predicted for airlines
News reports state that a tough second half of the year has been predicted for airlines due to declining passenger demand and rising fuel prices.
The warning came from Iata against a backdrop of economic uncertainties which saw demand fall in July across the globe with the exception of Africa, the Middle East and domestic services in China.
The slowdown in travel growth is being driven largely by the recent fall in business confidence in many economies.
Director general and chief executive Tony Tyler said: “The uncertain economic outlook is having a negative impact on demand for air transport.
“The cargo business is 3.2% smaller than it was a year ago. And passenger markets—with the exception of Africa, China-domestic and the Middle East—saw demand fall from June to July.
23 August 2012
Qantas first annual loss
News reports state that The airline announced its first annual net loss since privatisation yesterday while also cancelling 35 firm orders for Boeing 787-9 Dreamliners worth $US8.5 billion ($8bn) at list Price.
But Qantas unions attacked the loss, with the Transport Workers Union and the Australian Licensed Aircraft Engineers Association both calling for top management to stand down and the pilots association accusing Qantas of reducing its full-service international operation to "a husk".
The statutory loss was driven by record fuel costs of $4.3bn, up $645m on last year, the $194m cost of industrial action and one-off restructuring costs of almost $400m.
While the airline gave no profit guidance, Mr Joyce said the transformation of Qantas International, which lost $450m in 2011-12, remained on track after cutting loss-making routes, extending alliances and the previously announced maintenance changes resulting in the loss of an estimated 2800 jobs.
23 August 2012
TAP Portugal first half loss of €112 million
News reports state that TAP Portugal reported a net loss of €112 million ($138 million) for the first half, 14.6% worse than the year-ago period.
The airline blamed strikes and soaring fuel prices for the deteriorating financial performance, but stressed that operations “are highly seasonal and a considerable improvement is expected in the second half of the year.”
The company’s fuel bill rose 20% to €390 million from €325 million in the year-ago period, which “contributed substantially to the general increase in operating costs,” the airline said.
16 August 2012
GOL losses widen to $353 Million
News reports state that Brazil’s GOL reported a second-quarter net loss of BRL$715.1 million ($353 million), widened from a BRL$358.7 million loss in the year-ago period.
The airline said the results were due to “unfavorable macroeconomic scenario,” including “high fuel costs, depreciation of the Brazilian real against the US dollar, which has a direct impact on 55% of the company’s operating expenses.”
15 August 2012
Asiana Airlines net loss of $41.8 Million
News reports state that Asiana Airlines (OZ) reported a non-consolidated net loss of KRW47.3 billion ($41.8 million) for the second quarter, reversed from the year ago quarter’s KRW17.7 billion profit, largely owing to “the continuous high fuel cost and the increment of operating cost as the operation expands,” it said.
10 August 2012
SAS net loss of $61.1 million
News reports state that SAS (SK) announced a loss for the half-year ending June 30 and cited an uncertain outlook for the remainder of the period.
The Scandinavian carrier recorded a net loss of SEK409 million ($61.1 million), compared to a profit of SEK178 million for the 2011 first half. Revenue was marginally up at SEK20.9 billion, compared to SEK20.6 billion a year ago. Passenger numbers rose 4.1%.
10 August 2012
Air Canada 2nd quarter loss of $96 Million
News reports state that Air Canada (AC) reported a second-quarter net loss of C$96 million ($96 million), more than doubling a C$46 million net deficit in the prior-year period, as labor difficulties again hurt the Montreal-based carrier’s bottom line.
“Air Canada’s operations were adversely impacted by labor disruptions in March and April of 2012, which resulted in a decline in bookings for travel originating in Canada in the immediate aftermath,” he said. “We were encouraged to see booking trends return to normal levels by the end of the second quarter … New collective agreements have now been finalized … [bringing] finality to what has been a challenging collective bargaining process with our large Canadian-based unions.”
10 August 2012
Cathy Pacific $120 Milion net loss first 6 months
News reports state that Cathay Pacific Group (CX) reported a net loss of HK$935 million ($120 million) for the first six months of 2012, a steep reversal from the net profit of HK$2.8 billion in the first half of 2011.
The Hong Kong-based carrier cited “persistently high price of jet fuel, passenger yields coming under pressure and weak air cargo demand” as the main reasons for the result.
9 August 2012
Air Berlin losses widen
News reports state that Air Berlin, the German airline partly owned by Gulf carrier Etihad, said on Wednesday that its second-quarter loss widened due to soaring fuel costs, the euro's weakening against the U.S. dollar and a German air travel tax.
In the three months through June, Germany's second-biggest airline after Lufthansa posted a net loss of 66.2 million euros ($81.8 million), compared with a year-earlier loss of 43.9 million.
Air Berlin, which has not posted an annual operating profit since 2007, is trying to shrink its way back to profitability after growing rapidly and racking up debt.
5 August 2012
Virgin operating loss of £80.2 million
News reports state that the UK’s Virgin Atlantic Group, which includes Virgin Atlantic Airways (VS), recorded an operating loss of £80.2 million ($120.3 million) for the 2011-12 financial year, compared to an £18.5 million operating profit for the preceding year.
3 August 2012
Britsih Airways profit wiped out
News reports state that International Airlines Group swung to a €390m pre-tax loss in the six months ended 30 June 2012 from a €39m profit a year ago.
Revenue grew by 9.8% to €8.5bn, but costs were up 14.3% at €8.8bn, including a 25% jump in fuel costs to nearly €3bn, resulting in an operating loss of €253m before exceptional items, versus a €88m profit last time.
The restructuring of bmi, which IAG acquired from Lufthansa in April, accounted for most of the €38m exceptional items incurred.
British Airways made a first half operating profit after exceptional items of €13m, but Iberia reported a €263m loss.
For the second quarter alone IAG recorded a €4m operating loss before exceptional items, including €50m of bmi losses, on revenue up 11.5% at €4.6bn.
The group ended the first half with cash of €4bn, up €278m from the end of 2011. Group net debt came to €1.3bn, up €160m over the same period.
1 August 2012
Aer Lingus deficit continues
News reports state that A series of exceptional items dragged down Aer Lingus (EI) in the 2012 first half, widening the carrier’s deficit compared to the year-ago period.
EI’s six-month pre-tax loss widened to €24.5 million ($30.2 million) compared to €13.7 million in 2011. Major items behind the loss were cost provisions associated with EI’s Greenfield restructuring program (€11.7 million), plus €4.3 million in fees to advisors who helped to oppose Ryanair’s recent takeover bid.
31 July 2012
SOL Airlines goes into liquidation
News reports state that the Paraguayan state airline, Sol of Paraguay announced today that it was going out of business because of the economic crisis it has suffered due to the isolation of the country after the constitutional president, Fernando Lugo, was deposed. A press release from the company said that the causes of the disappearance of its regular operations, starting August 1st, are the financial crisis in the region and the lack of support from neighboring countries, in allusion to the sanctions imposed by Mercosur and Unasur.
These things are limiting our growth and causing irreparable economic damage, said the airline.
30 July 2012
Delta Airlines subsidiary Comair to cease operators
News reports state that Delta Air Lines (DL) said Friday it will shut down regional subsidiary Comair after Sept. 29.
Cincinnati-based Comair, which is DL’s only wholly owned regional subsidiary following the sales of Mesaba and Compass Airlines in 2010, had already undergone a major downsizing. According to Comair’s website, the airline still serves about 60 Canadian and US cities with around 290 daily flights operated under the Delta Connection brand. Formed in 1977, the airline carried 5.6 million passengers in 2011.
30 July 2012
Air France - KLM increased loss of €895m for 2nd quarter
News reports state that Air France-KLM has seen quarterly losses widen to €895m, compared to a €197m loss in the second quarter of 2011.
Reporting figures for the three months to 30 June, the carrier said it took a one-off restructuring charge of €368m to cover redundancy payments as part of plans to cut 10% of its workforce.
30 July 2012
OLT Express files for bankruptcy
News reports state that OLT Express, the airline which had revolutionised domestic air travel in Poland, has suddenly announced it has filed for bankruptcy.
Friday morning saw the cancelation of 16 departures and 14 arrivals at Warsaw’s Chopin Airport, and the company tweet, “Today the company has filed for bankruptcy. We wish to inform you that a decision by the Civil Aviation Authority means that as of July 27, OLT has had its operating licence revoked with immediate effect.”
It also added that, for the time being at least, its charter arm would continue to operate.
Passengers and holiday makers only learnt of the cancelations upon arriving at the airport, with the news being displayed on official information boards.
26 July 2012
Delta US$168 Million 2nd Quarter loss
News reports state that Delta Air Lines Inc reported a quarterly loss on Wednesday as it took $561 million in charges for fuel hedge contracts, but the company forecast a profit for the current period.
The company reported a second-quarter net loss of $168 million, or 20 cents a share, compared with a year-earlier profit of $198 million, or 23 cents a share.
Special items, which also included $171 million in severance costs for voluntary buyouts, came to $754 million in the quarter.
22 July 2012
Korean Air $140 million second quarter loss
News reports state that Korean Air (KE) incurred a KRW159 billion ($140 million) net loss in the second quarter, reversed from a KRW21 billion net profit in the year-ago period. Steep foreign exchanges losses and interest expenses helped push KE into the red for the three months ended June 30.
17 July 2012
European carriers forecast €1.5 billion loss in 2012
News reports state that Europe’s network carriers are forecasting a €1.5 billion ($1.8 billion) EBIT loss in 2012, as the bottom line fails to keep pace with traffic growth.
Assn. of European Airlines (AEA) acting secretary general Athar Husain Khan said, “2012 was foreseen with a gloomy, uncertain economic outlook and our forecasts are proving to be accurate.” AEA said the European market “is clearly not able to absorb higher fares” and that its members have had “limited” benefit from falling fuel prices due to adverse euro/dollar exchange rates and hedging programs.
9 July 2012
Pluna declares insolvency
News reports state that Uruguay's flagship airline PLUNA Líneas Aéreas Uruguayas S.A. has declared insolvency, one day after announcing the indefinite suspension of all flights due to the company's financial difficulties.
Company president Fernando Pasadores made the announcement in a radio interview on Friday. Pluna executives said the next step would likely be to liquidate the company, which was taken over by the state last month.
The state had originally owned 25 percent of shares, but took control of the company after the withdrawal of private consortium LeadGate, which owned 75 percent.
5 July 2012
Virgin America 1st Qtr loss of $49 million
News reports state that Virgin America (VX) has reported a first-quarter operating loss of $49 million, a 65% worsening compared to the $29.5 million operating loss for the same period last year.
The carrier cited fuel costs that were 47% higher, costs associated with capacity growth, and a transition to a new reservations system as reasons for the loss.
29 June 2012
Czech Airlines increased losses triples deficit to $11.6 million
News reports state that Czech Airlines (OK) recorded an increased pre-tax loss in 2011, tripling its deficit to CZK241.3 million ($11.6 million) from CZK76.1 million in 2010. Rising fuel costs and previously incurred financial obligations were cited as reasons for the poor results.
Revenue dipped to CZK16.9 billion, down from 2010’s CZK21.5 billion. Costs declined to CZK17.1 billion compared to CZK21.4 billion in 2010.
OK is in the middle of a three-year restructuring plan. Chairman Philippe Moreels said a combination of financial leasing obligations for previously ordered aircraft and a 40% jump in fuel costs have negated the progress.
27 June 2012
Air Finland files for bankruptcy
News reports state that Air Finland, the 10-year-old airline and package tour operator, has ended all operations and filed for bankruptcy. All flights are cancelled as of Tuesday evening, 26th June 2012.
In a brief statement on its website, the leisure airline expresses deep regret for the harm caused to its customers by the sudden announcement. According to STT, the Finnish News Agency, there are now around 1,000 Air Finland customers abroad.
19 June 2012
Chinese carriers report a $216 million loss in May
News reports state that Chinese carriers posted a collective net loss of CNY 1.37 billion ($216 million) in May, reversed from a net profit of CNY1.88 billion year-over-year. The industry attributes the reversal to the slowdown of domestic market demand and exchange losses resulting from yuan depreciation.
14 June 2012
Air Mauritius net loss of €29.2 million
News reports state that Air Mauritius (MK) has reported a full-year net loss of €29.2 million ($36.5 million) for FY2011-12, reversed from a profit of €9.9 million in the previous year.
The €8.3 million fourth-quarter loss was in line with forecasts, and follows a €20.9 million net loss for the nine months ended Dec. 31, 2011.
The airline blamed a “stagnant airline industry in general and a slowdown in tourism in Mauritius—reflecting problems in Europe in particular.” MK cited rising fuel costs for the greatest impact on operating costs. “The year-on-year increase in Air Mauritius's fuel costs alone amounted to over €47.8 million,” the airline said in a statement.
12 June 2012
REDjet files for bankruptcy
News reports state that low cost carrier REDjet which attracted many passengers in Guyana and other parts of the Caribbean today formally signalled its closure and has applied for bankruptcy protection.
The Barbados-based carrier had suspended operations in March after competition from other airlines put it severely in the red. Attempts to get financing from the Barbados and Guyana governments failed and the airline remained grounded.
11 June 2012
Flybe reports a pre-tax loss of 6.2m
News reports state that Flybe reported pre-tax losses of £6.2m for the year to 31 March 2012, compared to a loss of £4.3m the previous year.
Group revenue increased 3.3%, to £615.3m, compared with £595.5m in 2011.
Jim French, chairman and chief executive, said: ‘We remain in a challenging environment. However, Flybe today is a business of real scale and substance, and one which has again demonstrated its resilience.
11 June 2012
European airlines downgraded with losses expected at $1.1bn
News reports state thautter outlook for Europe’s airlines has been downgraded, with European losses now expected to be $1.1bn, nearly double the previous forecast of $600m.
The International Air Transport Association (IATA) said overall global industry profits are expected to be $3bn, unchanged from the last update in March.
Falling oil prices, stronger-than-expected growth in passenger traffic and a bottoming out of the freight market are helping boost aviation – but this is offset by the ‘continued and deepening European sovereign debt crisis’.
‘There has been no let-up in the volatility of the economic environment. A few months ago, an oil price crisis was the biggest risk. Now all eyes are back on Europe,’ said Tony Tyler, IATA’s director general and chief executive.
‘But with little clarity on how European governments will manage the situation beyond providing further liquidity, the risk of a major downward shift in economic prospects is very real.
‘The next months are critical and the implications are big.’
He said the eurozone crisis is standing in the way of improved profitability and the industry continues to face the prospect of a net profit margin of just 0.5%.
‘For European carriers, the business environment is deteriorating rapidly, resulting in sizable losses,’ said Tyler.
IATA also highlighted how European carriers continue to be hit by high and rising tax regimes, inefficiencies in air traffic management, and the ‘high cost of complying with poorly thought-out regulations’.
5 June 2012
Qantas earnings drop 91%
News reports state that Qantas Airways Ltd. surprised the market Tuesday by warning that full-year earnings may sink up to 91% as deteriorating global economic conditions widen losses at its struggling international-flights unit.
Qantas shares slid as much as 18% in Sydney to a record low after Australia's biggest carrier said it expected pre-tax underlying profit for the year to June 30 of between 50 million Australian dollars ($49 million) and A$100 million, compared with A$552 million a year earlier.
At 2342 GMT, Qantas shares were 15% lower at A$1.20 each, reflecting how far investors were taken off guard by the severity of the profit warning.
"People were aware of the economic environment, but it's really starting to bite into earnings," said Angus Gluskie, managing director of White Funds Management. "It's also biting into cash flows. It's highly likely you're going to see them needing capital very shortly."
The weak forecast reflects downward pressure on demand created by Europe's debt crisis, soaring jet-fuel costs, declining bond yields, and competition in Australia's domestic travel market, Qantas said in a statement. The International Air Transport Association in March cut its forecast for airlines' net profit for 2012 to a combined US$3 billion, down from $3.5 billion previously.
Qantas said it expected an earnings-before-interest-and-tax, or EBIT, loss at its international flights unit of more than A$450 million. The figure is more than double the A$216 million loss reported for last year.
31 May 2012
Aegean 1st quarter loss of €25 million
News reports state that Aegean Airlines (A3) has reported first-quarter net income of €104.6 million ($131 million), slightly worse than for the same period last year. First-quarter net loss after taxes deepened to €25 million from €16.3 million in the year-ago quarter. Comparable first-quarter 2011 results include proceeds of €5 million from the sale of assets.
A drop in demand caused by global economic uncertainty—exacerbated by the worsening situation in Greece and compounded by high fuel prices—have all contributed to the decline in profits, according to the airline.
A3 managing director Dimitris Gerogiannis said demand for domestic and international air travel continued to suffer in the first-quarter as a result of deteriorating economic conditions. “From the beginning of the second quarter of 2012, we are implementing a new round of cost reduction initiatives,” he said, adding, “Nevertheless, the outlook remains weak with declining tourism demand for the summer season given the negative publicity for Greece.”
First-quarter passenger numbers fell 7% to just over one million when compared to the year-ago period, despite a 13% decrease in the number of flights operated. International passenger traffic was up 3% for the period, but the domestic market saw a significant 15% decline.
23 May 2012
Skyways Express (JZ) and City Airline (CF) files for bankruptcy
News reports state that Sweden’s Skyways Express (JZ) and subsidiary City Airline (CF) have stopped all flights and will file for bankruptcy, according to a statement on their website. CF was acquired by JZ last November.
“The owners of the company have decided not to fund the company any longer and therefore the board of directors was forced to decide to stop all payments and to stop all flights,” the airline said in a statement.
JZ and Denmark’s Cimber Sterling (QI) are both owned by Cyprus-based Mansvell Enterprises, which is 75% controlled by Ukrainian businessman Igor Kolomoisky. QI filed for bankruptcy earlier this month.
“We have come far in turning the company around but after the bankruptcy of Cimber it became almost impossible to continue,” CEO Mikael Wångdahl said.
JZ operated out of Stockholm with a fleet of 12 Fokker 50s, two Saab 340s, one Saab 2000 and one Bae146.
CF operated out of Gothenburg with seven Embraer E-145s, two E-135s and one MD-80.
The Swedish Pilot Assn. expects that up to 350 jobs could be affected.
18 May 2012
Tiger Airways reports $104 Million loss
News reports state that budget carrier Tiger Airwarys reported losses of $104.3 million for the financial year that ended on March 31 this year.
Chin Yau Seng, Group CEO, of Tiger Airways said that the losses stem from the six week suspension of its Australian operations last July.
The Australian civil aviation authorities had grounded Tiger Airways Australia over safety concerns, and even after it had lifted the ban, the Tiger Airways Australia was restricted to a limited number of flights.
"The Tiger Airways Australia suspension led to the under-utilisation of the Group's fleet, which resulted in significant and adverse variances in the Group's financial unit metrics," Mr Seng added.
Losses were also attributed to rising fuel prices.
18 May 2012
Air Berlin $132.4 million net loss for first quarter
News reports state that Oneworld member Air Berlin (AB), Germany’s second largest carrier, reported a first-quarter net loss of €102.9 million ($132.4 million), narrowed from a loss of €120.6 million in the year-ago quarter.
13 May 2012
Singapore Airlines profits drop 69%
News reports state that Singapore Airlines Group (SIA) reported net income of S$336 ($269.5 million) for its fiscal year ended March 31, a 69% drop from a S$1.09 net profit in the prior year. It also sunk to a fiscal fourth-quarter net deficit of S$38.2 million, reversed from a S$171 million profit in the 2011 March quarter.
“High fuel prices and an uncertain global economy weighed heavily” on the results, SIA said in a statement.
SIA’s passenger airline unit saw its fiscal-year operating profit fall 79% year-over-year to S$181 million. SIA said the steep drop “was principally on account of higher fuel expenditure [up 30%] and weaker yields.” Fiscal-year passenger yield was virtually flat year-over-year at S$0.118. Traffic rose 3.5% to 87.82 billion RPKs on a 4.9% lift in capacity to 113.4 billion ASMs, producing a load factor of 77.4%, down 1.1 points.
11 May 2012
IAG group (British Airways and Iberia) £211 million loss
News reports state that The owner of British Airways and Iberia blamed rising fuel costs, Government taxes and the impact of Spain's economic crisis for big losses in its first-quarter results today.
International Airlines Group (IAG), which was also hit by pilot strikes at Iberia, lost €263million (£211million) in the three months to March 31, much worse than its deficit of €47million in the same quarter last year.
Despite strong demand for London and transatlantic flights lifting revenues, British Airways was hit by mounting fuel bills and suffered operating losses of £62million compared to £5million in 2011.
Loss: BA owner IAG said government taxes, rising fuel costs and the impact of Spain's economy crisis hit profits in the first quarter
Iberia’s operating loss of €170million (£136.3million) reflected the airline’s worsening performance from its Madrid hub and the industrial action, which cost €25million (£20million) in the quarter. It has now been called off.
Fuel costs for the group were up by 25 per cent to €1.4billion (£1.1billion), and at current levels will increase by more than €1billion (£802million) this financial year.
11 May 2012
Emirates profits drop 72.1%
News reports state that Dubai-based Emirates Airline (EK) reported a 72.1% drop in net profit of AED1.5 billion ($409 million) in the 2011-12 financial year, compared to last year’s net profit of AED5.4 billion. The company cited the “stifling” cost of fuel as the reason for the decline. The drop came despite a 14.9% rise in revenue over the preceding year to a record AED62.3 billion.
The Emirates Group, which includes airport and airline support company dnata, recorded net profits of AED2.3 billion, compared to AED5.9 billion for the previous year. Group revenue was up 17.8% to a record AED67.4 billion.
EK chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum said the past year’s extremely difficult operating environment encompassed not only rocketing fuel prices and volatile exchange rates but also major regional problems caused by the Arab Spring, which disrupted schedules and passenger flows.
Handling that situation required “immense tenacity,” he said, adding that he was cautiously optimistic for the current year.
10 May 2012
Cathy Pacific shares plunge
News reports state that Shares in Cathay Pacific plunged Thursday, after the Hong Kong flag carrier announced a raft of cost-cutting measures and warned of "disappointing" first-half results due to high fuel prices.
The firm, which is listed at the Hong Kong stock exchange, fell 5.54 percent to HK$12.62 in morning trade, while the benchmark Hang Seng Index was 0.93 percent lower.
Cathay said Wednesday there was "no sign of a sustained recovery" in its cargo business due to rising fuel costs, and that its 2012 financial results scheduled to be announced on August 8 "are expected to be disappointing".
The last time Cathay had issued a profit warning was in 2008 before it posted full-year losses of HK$8.56 billion amid the global financial crisis.
The airline also cut its capacity growth forecast from the original seven percent to two percent, and said it will reduce the frequency of some long-haul routes to North America and Europe to ease outlays.
Other cost-cutting measures would include the earlier retirement of older aircraft, deployment of more fuel-efficient jets, a ground staff hiring freeze and voluntary unpaid leave for cabin crew.
"This is not just a Cathay Pacific problem, it is clearly an industry-wide issue, and continued high fuel prices in particular are hitting airlines hard across the globe," chief executive John Slosar has said.
The firm in March reported a 61 percent plunge in its net profit for 2011 and has warned that 2012 could be "even more challenging" than 2011.
8 May 2012
Air France first quarter loss widens
News reports state that Air France KLM Group reported a first-quarter loss of €368 million ($481.3 million), widened from a €367 million loss in the year-ago period.
The Group said the results were largely in line with expectations, with the rise in fuel costs outstripping a 5.6% increase in passenger unit revenue. Ongoing weakness in the cargo sector, driven by the persistent weakness of international trade, also contributed to what the carrier described as “a tough quarter.”
8 May 2012
Hainan Airlines profits down 37.5%
News reports state that Hainan Airlines (HU) reported a net profit of CNY175.6 million ($27.8 million) in the first quarter, down 35.7% compared to CNY272.3 million reported in the year-ago quarter.
Industry analysts cited the slowdown of domestic market, high fuel prices and the slowing of yuan appreciation for the results.
HU’s operating revenue climbed 22.7% to CNY7.06 billion against a 27.8% increase in operating expenses to CNY5.51 billion, due to rising fuel costs.
6 May 2012
Air Canada's losses widen in 1st quarter
News reports state that Air Canada (AC/A), the country’s largest carrier, posted a wider first-quarter loss as fuel expenses rose and it booked costs tied to the restructuring of a former maintenance unit now called Aveos Fleet Performance Inc.
The net loss was C$210 million ($212 million), or 76 cents a share, compared with C$19 million, or 7 cents, a year earlier, Montreal-based Air Canada said today in a statement. Revenue advanced 7.6 percent to C$2.96 billion.
Air Canada’s fuel bill rose 20 percent to C$889 million, and it booked costs of C$120 million tied to Aveos, which shut down and filed for insolvency protection March 19. The airline, whose parent sold control of the maintenance provider in 2007, was required to pay severance to as many as 1,500 workers.
3 May 2012
Lufthansa posts a 1st Quarter of USD$501.1 million
News reports state that Lufthansa said high fuel costs triggered a bigger than expected first-quarter loss and forecast it might only hit its profit target if costs from a new restructuring plan were excluded.
The operating loss for the first three months of the year more than doubled to EUR€381 million (USD$501.1 million) from EUR€169 million a year earlier, the company said on Wednesday.
Lufthansa, which is due to publish its full earnings report on Thursday, has vowed to make tough cost cuts and restructure its loss-making Austrian Airlines unit to return to profit amid economic uncertainty and high fuel prices.
The carrier said in March it saw its fuel costs jumping by almost 20 percent this year, to EUR€7.5 billion, which would eat away about a quarter of annual revenues.
3 May 2012
SAS posts $163 million 1st Quarter loss
News reports state that Scandinavian airline SAS posted a first-quarter loss, hurt by a weak economic environment and rocketing jet fuel prices.
SAS has been struggling for years with higher costs than no-frills competitors Ryanair and Norwegian Air Shuttle.
The airline, half-owned by Sweden, Norway and Denmark, made a pretax loss of SEK1.1 billion Swedish kronor (USD$163 million).
"The negative trend was due to sharp increases in jet fuel prices, the uncertain economic climate and the fact that the earnings effects of the 4Excellence programme will not be generated until the latter part of 2012," chief executive Rickard Gustafson said in a statement on Thursday.
3 May 2012
Cimber Sterling declares bankruptcy
News reports state that Danish no-frills airline Cimber Sterling said on Thursday it has declared bankruptcy after its owners pulled financial support from the company.
"Because of this the board of directors has decided to declare the company bankrupt," Cimber Sterling said in a statement.
In August last year, Mansvell Enterprises, an investment vehicle of Ukrainian businessman Igor Kolomoisky, offered to buy out Cimber's minority shareholders for DKK1.50 kroner per share.
The offer for minority shares followed Mansvell's acquisition of a 70.8 percent stake in Cimber through a directed share issue on August 1.
Cimber Sterling, a small rival to Scandinavian airline SAS, Finland's Finnair and Norwegian Air Shuttle, among others, was hit by fierce competition between low-cost carriers and rising costs when it expanded beyond its home Scandinavian region.
"The board of directors and the management team have worked intensely to ensure a turnaround of the company for several months but unfortunately we did not succeed before we ran out of time," chief executive Jan Palmer said in the statement.
A court will appoint one or more administrators for the bankrupt airline, Cimber Sterling said, adding that it would work with them to try to preserve as much of the operations as possible under a reconstructed company.
But Cimber Sterling said passengers tickets were "worthless" and the airline's website said all flights were cancelled.
1 May 2012
Aeromexico profits down 49%
News reports state that Grupo Aeromexico (AM) has reported first-quarter consolidated net income of MXP $135 million ($10.4 million), down 49% on the year-ago period. Revenue increased 17% to a record MXP$9.2 billion ($701 million).
AM said the results were affected by a peso depreciation of 8%. Revenue increases were mainly due to a 16% improvement in passenger revenues and a 106% increase in cargo revenues.
First-quarter operating profit is MXP$452 million, down 29% from the prior-year quarter.
27 April 2012
Norwegian Air Shuttle 1st Quarter loss of $49.8 Million
News reports state that Norwegian Air Shuttle (DY) reported a first-quarter net loss of $49.8 million, a slight improvement on its loss of $51 million for the year-ago period. DY president and CEO Bjorn Kjos said the results were due to the first quarter being a traditionally weak period, combined with “particularly challenging” oil prices, up some 15% compared to the same period last year.
27 April 2012
United Contiental net loss of $448 Million for 1st Quarter
News reports state that United Continental Holdings (UCH) incurred a first-quarter net loss of $448 million, widened from a net deficit of $213 million in the prior-year period. It blamed the poor results on costs associated with the ongoing integration of United Airlines and Continental Airlines.
27 April 2012
Air China & China Southern Airlines 1st Q profits plumment
News reports state that Air China (CA) and China Southern Airlines (CZ) saw their first-quarter income plunge due to high fuel prices and the slowing of yuan appreciation, according to carrier statements released by Shanghai Stock Exchange.
CA reported first-quarter net income of CNY239 million ($37.8 million), down 85.7% over CNY1.67 billion in the year-ago quarter. Operating revenue increased 7.7% to 22.9 billion against an increase of 16.9% in operating expenses to CNY22.71 billion.
CZ posted a first-quarter net income of CNY319 million, down 74.2% from CNY1.23 billion in the same quarter of last year. Operating revenue climbed 15.5% to CNY23.7 billion while operating expenses jumped 23.8% to CNY23.4 billion.
Neither carrier released first-quarter traffic figures.
Industry analysts also cited market demand slowdown as the main reason for the results.
26 April 2012
BA's Willie Walsh warns of more airline failures
News reports state that British Airways and Iberia boss Willie Walsh warned of further airline bankruptcies in the coming year and said he envied the economic model of major Gulf carriers that have managed to redraw the aviation map efficiently around the Middle East.
The chief executive of International Airlines Group joined the head of Dubai's Emirates and other industry leaders in predicting further retrenchment, as weaker airlines struggle to generate the cash needed to ride out high oil prices.
"I expect to see significant moves on the subject of consolidation as we move through the year and into next year," Walsh told the AFCA aircraft finance conference in Barcelona.
Although some airlines like IAG itself are expected to gobble up smaller rivals, Walsh said the shake-up would also include "probably the cheapest form of consolidation for the industry and that is where we see airlines fail".
About half a dozen European airlines have folded in the past year including Barcelona-based Spanair which stopped trading in January despite a cash injection from the Catalan government.
Walsh delivered his comments with a warning to striking Spanish pilots that Iberia would "have no future" if it did not see through reforms that include the creation of low-cost Iberia Express, designed to replace labour rules at the main carrier.
Spanish pilots are staging a series of strikes to try to halt the creation of the cheaper sister airline.
Walsh, who led BA to a merger with Spain's Iberia under the umbrella of IAG last year after a bitter series of cabin crew strikes in the UK, said he would not back down on the move to get rid of pilot contracts he called "frankly outrageous".
In further blunt comments, Walsh said IAG would close two loss-making subsidiaries inherited from the acquisition of Lufthansa's UK unit bmi if it is unable to sell them.
IAG plans to keep the main bmi airline, but is struggling to sell its low-cost and regional units, bmibaby and regional. It meanwhile continues to seek acquisition targets.
"Our approach will be one of greater caution. We are not looking to consolidate just to make IAG bigger," Walsh said.
25 April 2012
China Eastern & Cathy Pacific downgrade profits for Q1
News reports state that China Eastern Airlines (MU) and Cathay Pacific Airways (CX) have downgraded their first-quarter profit forecasts citing the slowdown of market demand and high fuel prices. They also pointed to increasing global economic uncertainties and political turmoil in Middle East for the forecast downgrade.
MU expects its first-quarter profit to drop by more than half from CNY1.01 billion ($155.8 million) reported in the year-ago quarter.
CX said it may have to park aircraft and reduce the number of flights if weakening demand and high fuel costs persist, according to Dow Jones. The Hong Kong-based carrier, which had already warned of a very challenging 2012, said business has worsened over the last month with falling passenger yields for its economy-class products as well as its more profitable first- and business-class cabins.
“Fuel prices remain at crippling highs and our cargo business still shows no sign of any sustained pick-up,” CX CEO John Slosar said. “The recent turmoil in the euro zone reinforces the fact that the world is still balancing on a knife edge.”
China Southern Airlines (CZ) earlier this month predicted a sharp first-quarter decline, citing similar reasons.
19 April 2012
American Airlines parent AMR reports 2012 1st Quarter net loss of US$1.7 Billion
News reports state that AMR Corporation, the parent company of American Airlines, Inc., today filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission. The report summarizes AMR's business and financial results for the first quarter ended March 31, 2012, on a consolidated basis.
In first quarter 2012, AMR incurred a net loss of $1.7 billion compared to a net loss of $436 million in the same period of 2011. Excluding reorganization and special items, the net loss was $248 million compared to the net loss of $405 million for first quarter 2011.
13 April 2012
Chinese carriers post losses
News reports state that Chinese carriers reported a net loss of almost CNY200 million ($31.6 million) in March, reversed from a collective net profit of CNY1.71 billion in the year-ago month, due to high fuel prices and a decline in cargo traffic.
Industry analysts said market demand started to pick up in April with continuous domestic economic growth and slow global economic recovery but rising fuel expenses still remain a major challenge.
Fuel costs rose 16% in March, an increase of CNY1.64 billion over the same period last year. Analysts said that fuel surcharges revenue, which was CNY1.17 billion, was not enough to offset rising fuel expenses.
Earlier this month the Chinese government has raised domestic jet fuel prices to CNY8,061 ($1,275) per ton, up 4.35% from CNY7,725 per ton.
“In the first quarter, domestic carriers increased operating expenses [mainly fuel costs] by 22%, which has a big negative impact over Chinese airlines’ financial performance. To make matters worse, domestic carriers got less exchange gain this quarter over the year-ago quarter,” Great Wall Securities aviation analyst Liu Kun said.
3 April 2012
Aerosur suspends all domestic and international flights
News reports state that Bolivia's largest airline, Aerosur, has suspended all domestic and international flight operations from 31 March, leaving thousands of passengers stranded.
While the airline has made no official announcement, its website remains inaccessible and its Bolivan call centre unreachable. An employee at Aerosur's Madrid office confirms that the airline is "not operating" and "is not paying employees and providers", which forced the airline to cancel its 31 March evening departure to Santa Cruz and ground its aircraft in Madrid.
Bolivia's Minister of Public Works, Vladimir Sanchez, confirmed on Bolivian TV that the airline had ceased operations. He denied reports that the Bolivian government had forced the grounding. Sanchez confirmed that Aerosur's tax debt amounted to 1.34 billion Bolivianos (US$ 142 million), although Aerosur had disputed the amount in previous occasions in local courts, where the case remains open. This has so far prevented the government from impounding Aerosur accounts or goods. The actual debt, including interest, fines and debt with banks and providers, could vastly exceed this amount.
"We will do our best to save the jobs and recover the operations of the airline," Sanchez said, but he added: "But we will not use public money to subsidise the airline. We will do what we can to help the airline to be able to help itself, but they [Aerosur] will have to develop their own rescue plan."
** Cover for this airline is now excluded for all travel insurance policies and air tickets issued with immediate effect.
2 April 2012
Pinnacle Airlines files for bankruptcy protection
News reports state that Pinnacle Airlines Corp filed for bankruptcy protection late on Sunday, as the U.S. regional airline fell victim to high fuel prices and dampened travel demand that has negatively impacted some of the major players in the industry.
In a filing with a U.S. bankruptcy court, Pinnacle said it seeks to resolve its operational and financial difficulties through the Chapter 11 process. It also seeks to implement a turnaround plan by cutting costs and restructuring certain agreements with major airlines.
** Under IPP's policies cover for airlines that have filed for Bankruptcy protection at the date of purchasing insurance / air tickets is excluded unless otherwise agreed seperately by IPP.
30 March 2012
Aegean Airlines kept in red by Greek recession
News reports state that Aegean Airlines (A3) reported a net loss of €27.2 million ($36.3 million) in 2011, 17% down from the €23.3 million deficit in 2010 when results were negatively affected by one-off social contribution tax charges of €8 million.
29 March 2012
GOL income drops 40% resulting in full year loss
News reports state that Brazil’s GOL Linhas Aéreas Inteligentes reported a 2011 fourth-quarter net income of BRL$54.3 million ($29.9 million), down 40% from BRL$132 million in the year-ago period.
Net revenue rose 19.5% to BRL$2.2 billion, but expenses increased 41% to BRL$2.27 billion, producing an operating loss of BRL$33.9 million versus BRL$261.9 million a year ago.
For the full year, GOL posted an adjusted loss of BRL710 million ($390.3 million) in 2011, compared with a profit of BRL214.2 million in 2010. The airline said the loss was due to the impact of the real's depreciation against the dollar, rising fuel costs, and non-recurring expenses such as the return of aircraft and contract termination fees.
28 March 2012
Air China profits down 41 percent
News reports state that Air China Ltd., one of China's three major state-owned airlines, said its 2011 profit fell 41 percent due to high fuel costs and warned Wednesday it faces pressure this year due to weak global economic growth and stronger competition.
Profit fell to 7.1 billion yuan ($1.4 billion), or 0.58 yuan (9 U.S. cents) per share, despite a 19 percent increase in revenue to 98.4 billion yuan ($15.9 billion), the Beijing-based carrier reported.
Air China warned it will face "new challenges and greater pressure" this year due to slow growth in the United States and Europe, high operating costs and constraints on infrastructure and staff resources.
Fuel costs in 2011 rose 44 percent over the previous year to 34.7 billion yuan ($5.6 billion), the airline said.
23 March 2012
El Al sinks to a $49.4 Million loss for 2011
News reports state that El Al Israel Airlines incurred a $49.4 million net loss for 2011, reversed from a $57.1 million net profit in 2010, and said it will take a series of measures to restore profitability.
Full-year revenue grew 4% compared to 2010 to $2.04 billion. VP-finance Nissim Malki said that 2011 "was yet another challenging year for world civil aviation in general and especially so for El Al."
21 March 2012
Lack of guarantee may ground KingFisher
News reports state that Airport Authority of India (AAI) has said that they will have to ground Kingfisher Airlines if the company does not give a guarantee, sources said.
They also said that the Kingfisher Airlines is in the process of providing an inter corporate guarantee for 256 crores of airport dues pending for over 6 months. But if they are not able to do then we will have to ground their aircraft, AAI sources said.
20 March 2012
KingFisher Airlines to suspend all International Operations
News reports state that troubled Indian carrier Kingfisher Airlines is liable for prosecution over unpaid taxes, aviation minister Ajit Singh told reporters on Tuesday. The minister said the onus to save Kingfisher Airlines was on chairman Vijay Mallya. "Vijay Mallya has to convince DGCA (directorate related stories
DGCA summons Mallya, KFA risks losing permit
Kingfisher Airlines independent director quits board
general of civil aviation) that he is in a position to operate an airline. The onus is on him," Singh said.
Kingfisher Airlines has submitted a new flight plan to the country's aviation regulator and will operate up to 125 daily local flights with 20 planes, chief executive Sanjay Aggarwal said on Tuesday.
Kingfisher, which is scrambling to raise funds as banks have refused to lend the debt-laden carrier more for day-to-day operations, will discontinue all international operations by April 10, Aggarwal said after a meeting with the regulator.
Vijay Mallya said: "Kingfisher to suspend all international flights".
"DGCA assured that Kingfisher will maintain scheduling integrity," He also said
Earlier on the day, the aviation minister warned that government may cancel the flying licence of debt-laden Kingfisher Airlines if it fails to meet safety standards and pay its bills.
Vijay Mallya had been summoned to meet the DGCA Bharat Bhushan in New Delhi to explain the airline's current situation and discuss a revival strategy.
"It's a completely difficult situation which cannot go on like this. I would not like to speculate more," Bhushan said.
"We have to look at how they are meeting safety norms. The regulator continues to examine each Kingfisher flight for safety," Aviation Minister Ajit Singh told reporters.
"If required, the licence can be cancelled as passenger safety is a top priority," Singh said, adding Kingfisher's financial arrears could also force the carrier's grounding.
The carrier has cancelled nearly half of its flights due to a strike by pilots and its financial difficulties, running around 100 flights a day instead of its scheduled 175. The pilots are on strike over unpaid wages.
Kingfisher now operates 18 planes, Singh said, down from 28 last month. Before its cash squeeze, Kingfisher operated 64 aircraft monthly.
20 March 2012
Global Airline profits reduced on increased oil prices
News reports state that The International Air Transport Association (IATA) announced a downgrade to its industry outlook for 2012 primarily due to rising oil prices. IATA expects airlines to turn a global profit of $3.0 billion in 2012 for a 0.5% margin. This $500 million downgrade from the December forecast is primarily driven by a rise in the expected average price of oil to $115 per barrel, up from the previously forecast $99. Several factors prevented a more significant downgrade: (1) the avoidance of a significant worsening of the Eurozone crisis, (2) improvement in the US economy, (3) cargo market stabilization and (4) slower than expected capacity expansion.
“2012 continues to be a challenging year for airlines. The risk of a worsening Eurozone crisis has been replaced by an equally toxic risk—rising oil prices. Already the damage is being felt with a downgrade in industry profits to $3.0 billion,’’ said Tony Tyler, IATA’s Director General and CEO.
Airline performance is closely tied to global GDP growth. Historically, when GDP growth drops below 2.0%, the global airline industry returns a collective loss. “With GDP growth projections now at 2.0% and an anemic margin of 0.5%, it will not take much of a shock to push the industry into the red for 2012,” said Tyler.
20 March 2012
Air Berlin's losses widen
News reports state that Air Berlin (AB) reported a 2011 net loss of €271.8 million ($358.2 million), widened from a net deficit of €97.2 million in 2010.
In explaining the deepened 2011 loss, the carrier cited taxes, high fuel prices, Europe's severe winter, the Arab Spring and air traffic control strikes and strike threats. AB's 2011 revenue increased by 13.7% year-over-year to €4.23 billion. It carried 35.3 million passengers last year, up 1.2%.
19 March 2012
RedJet grounded due to financial woes
News reports state that there's more uncertainty concerning the resumption of flight service by low budget airline REDJet.
The Barbados-based air carrier which commenced flying to Jamaica last November announced on Friday March 16 that it had suspended all its flights.
REDJet's Chief Executive Officer Ian Burns declined to say when flights would resume.
The airline will reportedly issue a statement on Monday March19.
REDjet has complained that it does not receive Government assistance like other carriers, some of which have drastically cut their fares in an effort to force it out of business.
It stated that despite these efforts, its passenger numbers have continued to rise but it cannot continue to operate under present conditions.
19 March 2012
Cathy Pacific profits plunge 62%
News reports state that Cathay Pacific (CX) Group posted a net profit of HKD5.5 billion ($709 million) for 2011, down 62% over net income of HKD14.05 billion in 2010. CX said the results were affected by “persistently high jet fuel prices” and weak cargo demand due to “instability and uncertainty in the world’s major economies.”
Operating revenue climbed 9.9% to HKD98.4 billion while operating expenses jumped 19.4% to HKD92.9 billion. Fuel costs rose 37.5% to HKD38.88 billion.
16 March 2012
Air Berlin's losses widen
News reports state that Air Berlin Plc, Europe’s third-biggest discount carrier, said losses widened last year as tax and fuel expenses crimped margins and political unrest in North Africa led to a decline in the number of tourist flights.
The Berlin-based airline had a net loss of 271.8 million euros ($348 million), versus 97.2 million euros a year earlier, it said today in a statement. The average loss estimated by analysts surveyed by Bloomberg News was 169 million euros.
Air Berlin, which is almost 30 percent owned by Etihad Airways following a deal in December, paid 229.2 million euros more for fuel, and a German airport tax introduced at the start of 2011 cost it 165.6 million euros. Targeted savings of 200 million euros will all be implemented this year, while occupancy levels approached 75 percent in January for the first time since the company began keeping monthly records, it said.
“The numbers are very bad, worse than expected, but the planned savings for 2012 are very ambitious,” said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt who recommends selling Air Berlin shares. “Those savings and the better first quarter look to be relatively good news.”
Air Berlin fell as much as 3 percent and was trading 1.1 percent lower at 2.27 euros as of 9:25 a.m. in Frankfurt, taking the stock’s decline this year to 8.9 percent and valuing the company at 266 million euros.
14 March 2012
Cathay Pacific profits down 61%
News reports state that Cathay Pacific Airways, Hong Kong's biggest airline, says profit fell 61 percent last year, hurt by persistently high jet fuel prices and weakness in the world's major economies.
The airline warned of a "challenging" outlook for 2012 as it posted a profit of 5.5 billion Hong Kong dollars ($709 million) for 2011, down from a record the year before of HK$14 billion, which was boosted by some one-off gains. Earnings per share fell to HK$1.40 from HK$3.57.
Cathay said high prices for jet fuel - its single biggest cost - had a "significant effect" on operating results. The airline's fuel costs rose by HK$12.5 billion, or 44 percent, in 2011 from the year before, reflecting both higher jet fuel costs and that it flew more routes.
High fuel costs hurt profitability at its air cargo division, as fuel surcharges weren't enough to cover the gap.
12 March 2012
Air France KLM posts €0.5 Billion loss
News reports state that Air France KLM Group reported a net loss for its shortened nine-month 2011 financial year of €442 million ($580.5 million), reversed from a net profit €980 million in the year ago-period. The operating result was positive, but the reported €50 million operating profit was sharply down from the €525 million operating profit in the year-ago period.
On a pro forma basis for the full year, Jan. 1 through Dec. 2011, results were worse with net loss coming in at €809 million versus a pro forma €289 million profit in 2010.
Group chairman Jean-Cyril Spinetta described 2011 as “a tough year for the group, due to the uncertain operating environment and the high fuel price.” He stressed that in “in this context, the success of the transformation plan presented on Jan. 11 this year is all the more crucial. All the announced actions are already underway.”
8 March 2012
European Airline flag carriers hit by losses
News reports state that Air France-KLM, Europe’s second-largest flag-carrier by revenues, on Thursday warned that its results would deteriorate in the first half of 2012 after swinging to a loss in 2011.
The group, which is grappling with a large debt load and high operating costs, reported a worse-than-expected net loss of €809m for the year to December 31, compared with a €289m net profit in 2010. The airline’s shares fell 1 per cent to €4.10 in early trading.
Lufthansa, Europe’s largest flag-carrier by revenues, on Wednesday, surprised analysts by announcing a €13m net loss for 2011 compared with a net profit of €1.1bn in 2010.
It underlined how many airlines are struggling with the weak economic environment and rising fuel costs, although Lufthansa’s challenges were exacerbated by the fortunes of BMI British Midland, its lossmaking UK subsidiary that is due to be sold to International Airlines Group, parent of British Airways.
Jean-Cyril Spinetta, Air France-KLM’s chairman, described 2011 as a “tough year”, but insisted its new restructuring plan would enable the group to remain a “leading player” in the air transport sector.
Mr Spinetta resumed his former role as chief executive in October when Air France-KLM shuffled its top management in response to its challenges.
The group said the economic outlook for 2012 remained uncertain, while it expected its fuel bill to increase by €1.1bn this year.
“As a result, the operating result of the first half will be below that of the previous year,” it added. “However, the second half should benefit from the first effects of the three-year plan.”
Air France has introduced a wage freeze for 2012 and 2013 at the French part of the alliance and, together with other measures, the group is seeking overall cost savings of €1bn over the next three years.
Air France-KLM is the most leveraged of Europe’s major flag carriers, and it aims to cut net debt by €2bn to €4.5bn by the end of 2014.
The group’s net debt rose €450m over the year to €6.5bn at December 31, while gross cash fell €1.2bn to €2.3bn.
To preserve cash, the group announced it was cutting investment in its aircraft fleet. Investment has been capped at €700m in 2012, €600m in 2013 and €300m in 2014, compared with €1.2bn in 2011.
Peter Hyde, analyst at Liberum Capital, expressed concern at Air France-KLM’s strategic positioning, saying it faced strong competition from budget airlines on medium-haul routes and Gulf carriers on long haul.
Air France-KLM reported revenue of €24.4bn for 2011, up 4.5 per cent on 2010, when results were affected by the Icelandic volcano eruption that closed European air space.
The group swung from an operating profit of €28m in 2010 to a loss of €353m last year. The loss per share was €2.73 in 2011, compared with earnings of €0.98 the previous year.
7 March 2012
Armavia Airlines warns of bankruptcy
News reports state that Armenia’s national airline warned on Wednesday that it could file for bankruptcy because of its continuing financial dispute with Yerevan’s Zvartnots international airport managed by an Argentine operator.
Mikhail Bagdasarov, the owner of the Armavia airline, said it can no longer afford what he called exorbitant fees charged by the Zvartnots management for airport ground services.
“The economy was on the rise [in the past] and we could put up with this,” Bagdasarov told reporters. “Now the economy is down and we can’t get by anymore. That is why we are saying, ‘Either we declare bankruptcy or Zvartnots Airport lowers its tariffs by 25 percent.”
Bagdasarov claimed that some of those tariffs are two and even three times higher than at much larger airports in Russia and Europe. He said this is the reason why Armavia has run up $6.2 million in service debts to Zvartnots.
6 March 2012
GMC Airlines suspended by IATA
News reports state that The International Air Transport Association (IATA) has suspended Bangladesh's largest and oldest private carrier GMG Airlines Ltd from its billing and settlement plan (BSP) as the carrier failed to pay dues.
Due to the suspension, all travel and ticketing agents and general sales agents will remove GMG Airlines' ticketing authorities from their systems. The BSP travel agents will also stop all ticketing and refund transactions through the BSP link.
Industry insiders said the suspension will be a huge setback to the country's first private passenger airline as its payments using the BSP link and ticket sales in different countries will come to a halt.
5 March 2012
Republic Airways 4th quarter $123.5 million loss
News reports state that Special item charges impacted Republic Airways Holdings’ (RAH) 2011 fourth-quarter results and resulted in a $123.5 million net loss compared with a $1.3 million loss a year ago.
RAH, the Indianapolis-based parent of Frontier Airlines, Lynx Aviation, Chautauqua Airlines, Republic Airlines and Shuttle America, took charges totaling $224.2 million related to loss of value on its fleet of 42 regional aircraft in the 37-50 seat size and other fleet-related activities. Excluding the charges, net income would have been $17 million compared to an ex-item net income of $7.4 million a year ago.
Fourth-quarter operating revenue was up 7.4% to $697.8 million, while expenses rose 40.9% to $863.8 million, producing an operating loss of $166 million.
For the full year, the company reported a net loss of $151.8 million compared with a net loss of $13.8 million a year ago.
Operating revenue for the full year was $2.86 billion, up 7.9%, while expenses rose 17.8% to $2.97 billion, producing an operating loss of $105.6 million.
2 March 2012
American Airlines parent AMR losses US$234 in January
News reports state that despite operating under Chapter 11 status it has not stopped the huge losses at American Airlines (AA) parent AMR Corp.
The bankrupt company, which incurred a $2 billion net loss in 2011, reported a $234 million net loss for the month of January, according to a US Securities and Exchange Commission (SEC) filing.
1 March 2012
Malaysia Airlines in crisis, largest loss in history
News reports state that Malaysia Airlines recorded a stunning net loss of RM2.52 billion for 2011 and the company is now in “crisis”, the national flag carrier said today.
The carrier also confirmed that the losses for the 2011 financial year were the largest in its history.
The airline reported a massive net loss of RM1.28 billion in the fourth quarter, which was about as much as the first three quarters combined.
“The company is in crisis,” said Malaysia Airlines (MAS) CEO Ahmad Jauhari Yahya in a statement.
Ahmad said that the losses were due to higher expenses including a 25 per cent increase in fuel expenses and a 50 per cent increase in non-fuel expenses.
29 February 2012
Cyprus Airways posts a €19 million loss
News reports state that CYPRUS Airways (CY) today posted a €19 million loss, hit by intensified competition and rising fuel costs.
At the same time, the airline said it was drafting an action plan that included an increase of share capital and cutting labour costs, in a bid to secure its viability.
“Implementation of the measures of the Action Plan will lead to a drastic reduction in the operating losses for the current year in comparison to 2011 and it will have a favourable impact on the long term viability of the Company,” CY said in a statement.
Efforts to find a strategic investor will continue, it added.
The government, which owns 70 per cent of the airline, has said it wanted a strategic investor who could potentially assume a majority stake in the company.
Cyprus Airways said 2011 results reflect stiffening competition in its major markets and higher fuel costs.
28 February 2012
Alitalia €69 million net loss
News reports state that Alitalia Group (AZ) reported a 2011 net loss of €69 million ($92.9 million), a 58.9% improvement from an €168 million deficit in 2010. Operating loss was reduced from €106 million to €6 million “with a negative margin of 0.17% on revenues, in line with the operating breakeven objective,” the company said in a statement.
27 February 2012
Air Zimbabwe ceases operations
News reports state that Air Zimbabwe (UM) has ceased operations, an airline representative confirmed to ATW. The airline failed to secure a rescue plan, AFP reported Friday.
"I can confirm all flights are suspended. We are grounded indefinitely," UM CEO Innocent Mavhunga told AFP.
According to the newswire, one of its planes was impounded in London for more than two weeks last year over a $1.2 million debt dispute with a US spares company, prompting the airline to suspend flights to neighboring South Africa over another debt of $500,000 fearing creditors might impound more of its aircraft.
24 February 2012
Air New Zealand profits down by 61%
News reports state that Air New Zealand has announced a big slump in profits and warned that it is cutting more than 400 jobs.
Some staff will be made redundant, others will not be replaced when they leave, and more will not get their contracts renewed.
The airline’s six month net profit, after tax, was down by 61 percent to $38 million.
It is paying the price of high fuel costs and weak demand in international markets like Japan and Europe.
Air New Zealand chairman John Palmer says he is not happy about the situation.
“The result we are delivering today is a very disappointing one.”
The weak global economy means there is little room to raise ticket prices so instead costs and jobs must be cut, Air New Zealand chief executive Rob Fyfe says.
24 February 2012
Cyprus Airways expects 2011 loss
New reports state that Cypriot flag carrier Cyprus Airways said on Friday full-year results would be a "significant departure" from 2010 after being hit by intensified competition and rising fuel costs.
The board will meet on Feb. 28 to discuss full-year results and capitalisation issues.
Cyprus Airways, which made a net profit of 215,000 euros ($286,000) in 2010, posted a loss of 29.3 million for the first half of 2011.
The government, which owns 70 percent of the airline, has said it wanted a strategic investor who could potentially assume a majority stake in the company.
Cyprus Airways said 2011 results would reflect stiffening competition in its major markets and higher fuel costs. It would also feature a non-recurring expense from a redundancy scheme, and one-offs in income including a slot exchange at London Heathrow and profit from the sale of an aeroplane and three engines.
24 February 2012
Velvet Sky airline hits more turbulence
News reports state that further delays were announced in Durban by low-cost airline Velvet Sky Aviation on Friday morning.
It seems, however, that Velvet Sky Aviation may be grounded indefinitely. All flights were cancelled on Thursday, with the airline facing provisional liquidation proceedings by BP Southern Africa, brought before the Pietermaritzburg High Court on Friday.
The company has failed to pay an undisclosed amount it owes the fuel supplier.
This comes amid a financial dispute between Velvet Sky and SAA Technical that led to all flights being cancelled on Thursday and 600 passengers being stranded in Durban, Cape Town and Joburg.
BP spokeswoman Glenda Zvenyika confirmed that the fuel company had begun liquidation proceedings against Velvet Sky for money owed for fuel.
She said BP had to suspend supplies to Velvet Sky in January because of non-payment.
“BP Southern Africa and Velvet Sky had agreed payment terms over recent months, but Velvet Sky has not been able to meet these and unfortunately we have now been forced to take this action,” she said.
Velvet Sky operations chief Gary Webb said he did not have “first-hand information” on the liquidation application. “But that issue is being dealt with in Durban by our CEO, Dhevan Pillay,” he said.
Passengers whose flights had been cancelled would be reimbursed.
20 February 2012
SkyWest reports $27.3 million 2011 loss
News reports state that SkyWest Inc., parent of SkyWest Airlines and ExpressJet Airlines, reported a 2011 net loss of $27.3 million, reversed from net income of $96.4 million in 2010. Full-year revenue increased 32% to $3.65 billion, though this result and other statistical indicators are skewed by SkyWest's November 2010 purchase of ExpressJet, which it merged with subsidiary Atlantic Southeast Airlines in the 2011 fourth quarter. SkyWest did not provide pro forma figures.
Expenses rose 41% to $3.61 billion, producing an operating income of $41.1 million, down 80% from an operating profit of $201.8 million in 2010.
SkyWest chairman and CEO Jerry Atkin attributed the loss to some “unanticipated expenses in the fourth quarter,” including $15.6 million in additional maintenance costs and other costs attributed to the company’s foreign investments.
It posted a fourth-quarter net loss of $18 million, reversed from a $37.2 million net profit in the prior-year period.
20 February 2012
LOT makes a 2011 loss of $44.7 Million
News reports state that LOT Polish Airlines has posted a loss of PLN145.5 million ($44.7 million) for 2011, narrowed from a PLN163.1 million loss in 2010. LOT said the 2011 loss was mainly due to high fuel prices, lower fourth-quarter passenger traffic and a rapid increase in the dollar exchange rate at the end of the year.
LOT forecasted a PLN52.5 million profit for 2012.
"Excluding the effects of fuel price rises and exchange rate fluctuations LOT improved its financial result by PLN752 million over the past years," CEO Marcin Pirog said. LOT carried 4.6 million scheduled passengers last year, up 9% compared to 2010. Load factors were similar to those in 2010, an average of 74% and exceeded 81% in the high summer season, the carrier said in a statement.
17 February 2012
Air Australia collapse leaves 4,000 stranded and scrambling for refunds
News reports state that Budget airline serving Asia-Pacific destinations including Hawaii and Thailand went into voluntary administration and unable to pay for fuelThousands of passngers travelling from Hawaii to Thailand were stranded on Friday after the budget airline Air Australia ran out of money and went into voluntary administration, immediately grounding its five jets.
The Brisbane-based international and domestic airline – formerly known as Strategic Airlines – said all flights had been cancelled and it would not be accepting new bookings because it could no longer pay its bills.
Voluntary administration in Australia is similar to bankruptcy protection in the US, and can buy a company time to trade out of its financial problems.
16 February 2012
KingFisher losses widen
News reports state that Kingfisher Airlines Ltd’s third-quarter loss widened as it cut flights during the peak season and operating costs rose on high jet fuel prices and a steep depreciation of the rupee against the dollar.
The Mumbai-based airline reported a loss of Rs444.26 crore in the three months ended 31 December compared with a loss of Rs253.69 crore in the year earlier. Sales declined by 15.2% to Rs1,342.32 crore.
10 February 2012
Air Canada sinks to $250 million 2011 loss
News reports state that Air Canada (AC), in the midst of navigating challenging labor negotiations, reported a disappointing C$249 million ($250.2 million) 2011 net loss, widened from a C$24 million net deficit in 2010.
President and CEO Calin Rovinescu conceded to analysts and reporters that the carrier's current financial situation is untenable, necessitating change. "We are into a transformation," he said. "For us to be successful long-term, we have to transform."
He said the company is aggressively tackling controllable costs, exploring revenue enhancement initiatives, maintaining strong liquidity (about C$2.1 billion at year end 2011) and will continue to manage capacity "conservatively," with full-year system ASMs expected rise no more than 1.5% year-over-year in 2012.
But the labor situation, including the Air Canada Pilots Assn. calling for a strike vote this week and AC narrowly avoiding a flight attendants' work action last year (ATW Daily News, Oct. 14, 2011 [2]), continues to be "very challenging," Rovinescu said. The carrier is attempting to collectively bargain new labor deals with nearly all of its work groups.
Rovinescu said he is "optimistic" AC can solve its labor problems through "negotiations" and avoid service disruptions. He noted that "pension reform" remains the "main challenge" in talks with unions.
8 February 2012
SAS wider than expected net loss
News reports state that SAS Group, the Nordic region’s largest airline, posted a wider-than-expected fourth-quarter net loss as the collapse of its former Spanair brand last month led to a writedown on assets from their remaining ties.
The loss was 2.08 billion kronor ($312 million) compared with a 47 million-krona profit a year earlier, Stockholm-based SAS said today in a statement. The loss was wider than the 1.29 billion-krona average of four analyst estimates compiled by Bloomberg. Sales fell 4.6 percent to 10.2 billion kronor.
SAS, which hasn’t made an annual profit since 2007, and mainline competitors such as Air France-KLM (AF) Group and Deutsche Lufthansa AG are struggling to sustain earnings as discount carriers including Norwegian Air Shuttle ASA expand. SAS said today that 2012 will pose “greater challenges” as the company reorganizes amid a “weakening” economy and oil-price growth.
“They’re warning of a difficult year as they’re suffering from higher fuel costs and pressure on prices,” said Finn Bjarke Petersen, a Nordea Markets analyst in Copenhagen who recommends selling SAS’s stock and is predicting a “small negative result for the year.”
4 February 2012
Hawaiian 4Q income declines 70%, reports $2.6 million loss for 2011
News reports state that Hawaiian Holdings, parent of Hawaiian Airlines (HA), reported fourth-quarter net income of $20.9 million, down 70% from a $70.6 million profit in the year-ago period.
Fourth-quarter revenue rose 26.2% to $434 million while expenses increased 24.3% to $399.5 million, producing an operating profit of $34.5 million, up 54% from $22.4 million in the prior-year quarter.
4 February 2012
Tas-air Pty Ltd goes into liquidation
News reports that TASMANIAN airline and pilot training organisation Tas-Air Pty Ltd has gone into voluntary liquidation.
Tas-Air told its employees yesterday and flights have ceased.
A message on the company's website last night said ``pre-booked flights and future bookings should be directed to an alternate operator''.
Tas-Air offered flights to Hobart, Devonport, King Island, Burnie and Melaleuca.
Robert Tenbensel, of Tenbensel & Dee Chartered Accountants, was appointed liquidator.
A spokesman for Mr Tenbensel said one of his first tasks would be to determine why the business failed.
4 February 2012
American Airlines parent posts a $904 million net loss
News reports state that American Airlines parent AMR Corp. (AAMRQ) reported a $904 million net loss for December in the first monthly operating report during its Chapter 11 bankruptcy.
AMR said $713 million of the net loss was related to writing down the value of some of its Boeing Co. 757 airplanes. Excluding interest expense, reorganization costs and other items, the deficit was $728 million, the Fort Worth, Texas-based carrier said today in a regulatory filing.
Cash and short-term investments totaled $4 billion, little changed from the $4.1 billion the company reported as of Nov. 25, just before filing for court protection.
3 February 2012
Pawa Domininica and Acera airlines default for millions
News reports state that All flight operations of the airlines Pawa Dominicana and Acerca from and to Caracas, Venezuela, Curacao and Aruba, were suspended because of millions in debts in the country, leaving passengers with booked flights stranded for several days in Las Americas International Airport, without any response from their executives.
News source diariolibre.com reports that the two carriers owe more than two million dollars just to the Dominican Civil Aviation Institute, and have commitments pending with the Airport Departments and the airports management company Aerodom.
3 February 2012
Malev Hungarian Airlines ceases operations
News reports state that Hungarian flag-carrier Malev ceased operating early on Friday, ending 66 years of almost continuous service, after its planes were held overseas for unpaid debts.
Prime Minister Viktor Orban told Kossuth radio on Friday that the decision to ground Malev, which was placed under creditor protection earlier in the week, was made after two aircraft were not allowed to take off from Tel Aviv and Ireland.
In a December white paper, the government said the potential loss of the airline, which spent about 50 million euros a year on air service charges and real estate fees, could jeopardise the operation of Budapest Airport.
The airline accounts for 40 percent of turnover at the airport, owned by Germany's Hochtief and four financial partners.
"If this situation continues for a longer period of time, then we will obviously have to revise our business plans for this year and all our contractual obligations," Mihaly Hardy, a spokesman for the airport, told Reuters.
"There are some estimates that over 20 or 23 routes of Malev will never be served by other airlines," he added.
It was not immediately clear whether Malev's halt would automatically trigger a compensation option in the privatisation agreement of the airport first signed in 2005 with BAA, which sold it two years later to its current owners.
In the white paper, the Development Ministry had said the state could be required to pay about 1.5 billion euros ($2 billion) in such circumstances, with "grave consequences for the maintenance of the budget deficit target".
The ministry and Hochtief could not immediately respond to Reuters questions on Friday regarding the agreement.
Malev said its suppliers had lost confidence and started to demand advance payment for their services, while the government could no longer provide cash injections for the company following a European Union ruling last month.
"This has accelerated the outflow of cash to such an extent, that by today the situation of the airline has become unsustainable," Malev said on Friday.
"The board, in order to minimise losses, has ordered a halt in operation of the Hungarian national airline."
All flights were grounded from 0500 GMT. The airline's www.malev.hu website was taken offline and replaced with a message informing passengers about compensation options.
2 February 2012
Singapore Airlines profit plunges 53 percent in fourth quarter amid slowing global economy
News reports state that Singapore Airlines Ltd. said Thursday that quarterly profit plunged 53 percent as passenger demand slowed while higher fuel prices sent costs up.
Net profit in the fourth quarter was 135 million Singapore dollars ($108 million) compared with SG$288 million a year earlier, the carrier said in a statement.
The airline, known as SIA, warned a slowing global economy and high oil prices could continue to undermine profits this year.
“Forward bookings continue to show signs of weakness in the final quarter of the financial year, due to uncertainty in the global economy and the protracted Eurozone debt crisis,” the company said.
1 February 2012
Tiger Airways makes loss after grounding
News reports state that TIGER Airways Australia recorded a third-quarter operating loss of $S8.6m ($6.2m) as its parent spent its third straight quarter in the red.
The result for the quarter ending December 31 compared to an operating profit of $S5.9m in the previous corresponding quarter for the Australian business and contributed to an after-tax loss of $S17.4m for Tiger Airways Group.
It was the Singapore-based group's third straight quarterly loss.
TAG reported that group passenger numbers were down 12 per cent while capacity fell 2.7 per cent as a result of the Tiger Australia’s reduced flying program in the wake of its grounding for six weeks last year by the Civil Aviation Safety Authority over concerns about safety.
The suspension in July last year led to a major management shake-up in the airline, which is partially owned by Singapore Airlines and government investment arm Temasek Holdings.
30 January 2012
Air Alps ceases operations
News reports state that financially troubled Austrian regional Air Alps has ceased operations. The carrier operated three Dornier 328-100s, on mainly codeshare flights for Alitalia from Rome Fiumicino-Parma and Bolzano as well as Milan Malpensa–Salerno.
Welcome Air, a small regional carrier based in Innsbruck and owned by Swiss Lions Air Group AG, owns 76% of Air Alps.
Negotiations are under way with Welcome Air to either take over the carrier or form a new one. Welcome Air CEO Sabine Mertens told reporters he was not able for comment.
28 January 2012
Kenya Airways issues profit warning
News reports state that Kenya Airways, one of Africa’s leading carriers, has issued a profit warning, blaming the euro zone debt crisis, political unrest in Egypt and escalating fuel prices.
The warning is likely to surprise investors after the airline, which is 26 per cent owned by AirFrance-KLM, posted a 38 per cent jump in half-year pre-tax profit, aided by growth on its African and Asian routes.
"It is predicted that earnings for the year (ending March 2012) will be at least 25 per cent less than the level of earnings in the previous year," Kenya Airways said in a statement after the bourse closed on Friday.
28 January 2012
SAS issued profit warning
News reports state that Scandinavian airline SAS warned late Friday its former subsidiary Spanair's decision to file for bankruptcy would hit its results to the tune of 1.7 billion kronor (191 million euros, $252 million).
"Due to the situation in Spanair, SAS has decided to make a write down of the outstanding debt and receivables on Spanair (which will) affect the SAS Group's result as a non-recurring item and equity negatively by 1.7 billion kronor in total," the Scandinavian airline said in a statement.
The company said however that the effect on its "liquid assets" would amount to between 200 and 300 million kronor.
SAS, which sold off most of its once wholly owned subsidiary Spanair in 2009, said it still owned 10.9 percent of the Spanish airline.
But it stressed "the value of these shares has already been written down and are booked at zero value."
SAS said it would be a creditor in Spanair's bankruptcy process, and pointed to the 10.6 billion kronor "financial preparedness" it listed in its third quarter earnings report. The write-down would "have a limited effect on SAS liquidity", it said.
SAS, which posted a slim profit in the third quarter, is scheduled to announce its results for the fourth quarter and full-year 2011 on February 8.
The company said Friday that, not including the write-down and other non-recurring items, it expected the full year result to be positive.
28 January 2012
Spanair ceases flying, thousands stranded
News reports state that "Faced with the lack of financial visibility for the coming months, the company has decided to cease its operations as a measure of caution and safety," Spanair said in a statement just before 9.30pm last night.
Its last scheduled flight landed at 10pm, leaving rivals such as Iberia, Vueling and Easyjet to share out the passengers left stranded by the airline, which runs flights within Spain and Europe.
Spanish media said at least 22,000 passengers were affected over the weekend but Spanair spokespeople were not immediately available to confirm this.
The airline operated charter flights from Gran Canaria, Lanzarote and Malaga to Dublin during the summer season.
A queue of 200 surprised passengers formed at Spanair counters at Barcelona airport yesterday evening shortly after the announcement.
By this morning airports authority AENA said the situation was normal at Madrid's Barajas airport and Barcelona's El Prat, where special lounges had been allocated for Spanair customers.
"Passengers are turning up at these zones and the other companies are putting them on flights," an AENA spokeswoman said.
She said 55 Spanair flights were scrapped at Madrid and 54 at Barcelona today alone, with a handful of flights cancelled at Palma de Mallorca and Gran Canaria.
The company said in its statement: "The Spanair management regrets this and apologises to all those people who are affected by this situation."
27 January 2012
Czech Connect Airlines files for bankruptcy
News reports state that Czech Connect Airlines has filed for bankruptcy, with the operations of the Ostrava-based carrier ceasing on 21-Jan-2012. According to local medial reports from Mladá fronta dnes and Radio Prague, the suspension occurred after one of the carrier's main investors reportedly withdrew from the carrier. The airline’s owners and management will be discussing measures to save Czech Connect Airlines, launched in 2011, and to minimise the impact on customers, employees and business partners. Czech Connect Airlines' network was predominantly focussed on scheduled services to Russia and charter services for travel agencies to summer destinations.
22 January 2012
Cirrus Airlines ceases operations
News reports state that German regional carrier Cirrus Airlines (C9) ceased operations Jan. 20, announcing insolvency at a court in Saarbrucken. German Aviation Authority Luftfahrt-Bundesamt said the financially troubled carrier was not permitted to transport passengers and freight on a regular air services basis.
C9 said that all 300 employees are still working but it is unclear if and when the carrier will restart operations.
9 December 2011
Thai Airways 4th Quarter loss of $97.6 Million
News reports state that Thai Airways International (TG) expects a fourth-quarter loss of THB3 billion ($97.6 million) owing to the flooding in Thailand, TG president Piyasvasti Amranand said in an interview with the Bangkok Times. He indicated that TG might report a loss for 2011 given the decline of both local and international passengers.
Amranand said, “This year will see the number of passengers drop to a historic low for the year-end high season, with a possibility that the traffic will remain low in January next year.” He added that travel advisories caused visitors to change destinations although several tourist destinations were not hit by the floods.
In the first nine months of the year, TG reported a net loss of THB4.81 billion, reversed from a THB11.96 billion net profit in the year-ago period. Passengers carried increased year-on-year 4.2% to 13.9 million and yield rose 7.1%, lifting revenue 9.8% to THB147.37 billion. Expenses increased 15%, owing mainly to a THB3.33 billion loss on foreign currency exchange and 41.5% hike in the cost of jet fuel.
7 December 2011
Iata forecasts big drop in airline profits
News reports state that The International Air Transport Association (IATA) cut its forecast for airline industry profits by a quarter to $3.5 billion for 2012 and warned the industry could plunge to an $8.3 billion loss if Europe's debt problems trigger another banking crisis.
IATA, whose 240 airlines carry 84 percent of global traffic, had previously forecast industry profits of $4.9 billion in 2012 after an estimated profit of $6.9 billion this year. The 2011 figure remains unchanged in IATA's latest industry outlook.
"The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the eurozone sovereign debt crisis," said IATA Director General Tony Tyler on Wednesday.
"Such an outcome could lead to losses of over $8 billion, the largest since the 2008 financial crisis," he added.
So far aviation has been relatively optimistic about its prospects as Europe teeters on the edge of recession, with rising demand in Asia and capacity restraint in North America seen boosting profits and driving talk of a two-speed market.
But IATA, whose members include the likes of International Airlines, Lufthansa, Air China and American Airlines, said it could not ignore growing economic risks.
29 November 2011
American Airlines (AMR) files for bankruptcy protection
American Airlines, Inc. through its website announced that its parent company, AMR Corporation, and certain United States-based subsidiaries today voluntarily filed for Chapter 11 reorganization under United States law. American took this action in order to achieve a cost and debt structure that is competitive in the airline industry so that it can continue delivering a world-class travel experience for its customers.
American expects to continue normal business operations throughout the reorganization process, and the business will continue to be operated by the Company's management. The United States Chapter 11 reorganization process enables a company to maintain normal business operations while it establishes a competitive cost and debt structure. This action has no direct legal impact on any American Airlines operations outside the United States.
American Airlines is operating normal flight schedules, honoring tickets and reservations as usual, and making normal refunds and exchanges. American's AAdvantage® frequent flyer program is not affected. American remains part of the oneworld® alliance, of which it is a founding member, and all of its codeshare partnerships continue, enabling customers to earn and redeem miles on convenient flight options worldwide.
22 November 2011
Thomas Cook shares crash after default warning
News reports state that Thomas Cook asked lenders to come to its rescue for the second time in five weeks, sending shares in one of the world's oldest travel operators into freefall as it warned of a possible default.
Analysts said the move threw into question the future of the 170-year-old firm, which provides holidays for 19 million customers each year and employs 30,000 staff.
The company has been hit hard by tough trading conditions, especially in Britain, where its core customer base of families with young children has been particularly affected by tough economic conditions.
It was also hit by unrest in popular destinations such as Egypt, Tunisia and Morocco.
Evolution's James Hollins said it was shocking that Thomas Cook needed to renegotiate its financing just 32 days after a previous deal with its lending banks.
"Legitimate questions will be asked as to whether Thomas Cook can survive long-term and whether there is any value left in its equity," Hollins said.
Shares in Europe's second-biggest travel firm by holidays sold, were down 75 percent at 10.4 pence by 1605 GMT, taking total losses since the start of the year to 95 percent and leaving the group worth around 100 million pounds.
In debt markets, Thomas Cook's 300 million pound and 400 million euro bonds were trading at less than half of face value while its 150 million and 850 million pound credit facilities were being quoted at 60-65 percent of face value and looked set to drop further, according to traders.
Espirito Santo Investment Bank advised against holding Thomas Cook equity at any price.
"While the banks may yet again allow the group flexibility, realistically, we would expect Thomas Cook will be completely straight-jacketed by the banks," said Espirito Santo analyst Geetanjani Sharma.
Sharma also said Thomas Cook's suppliers and Britain's Civil Aviation Authority could take a closer look at the viability of allowing bookings from Thomas Cook, which had issued a string of profit warnings this year.
17 November 2011
GOL reports 3rd quarter net loss of $293.2 Million
News reports state that Brazil's GOL incurred a third-quarter net loss of BRL516.5 million ($293.2 million), reversed from a BRL110 million net profit earned in the year-ago period, but emphasized the deficit is mostly related to non-cash charges. The company did, however, see a big year-over-year rise in expenses and swung to an operating loss as well.
It said the net loss "was mainly due to the appreciation of the [US] dollar," which increased 18.8% in relation to the BRL from the end of the 2011 second quarter to the end of the third quarter Sept. 30. The carrier said the "depreciation of the Brazilian currency generated a net expense from the foreign exchange variation of approximately BRL$476.4 million, as most of the company's financial liabilities [72% as of Sept. 30] are represented in dollars."
15 November 2011
SeaFrance suspends services ahead of court hearing
News reports state that French ferry company SeaFrance has suspended services today ahead of a court hearing that will dictate the future of the company.
The court will decide whether SeaFrance, which has been in administration since June 2010, will be sold or liquidated.
A statement on the company's website said the board and receivers had decided, along with the French authorities, to suspend operations from 4am today. They may be resumed after the hearing.
It said: "We have taken this decision, with full knowledge of the consequences, to safeguard the security of the passengers, crews, vehicles and ships. We are conscious of the inconvenience this situation is causing and we apologise for this. We will keep you informed of any changes in the present situation."
A spokeswoman said customers with forward bookings would have their tickets transferred to another operator.
According to reports, a joint venture between ferry companies DFDS and LD Lines, and a separate bid from a SeaFrance staff and union co-operative, have been tabled to acquire the company’s ships. An earlier court hearing valued the SeaFrance fleet at between €123m and €168m.
SeaFrance operates ferry services between Calais and Dover and is 100% owned by the French railways, SNCF. It carries more than 3.5 million passengers a year.
11 November 2011
Jet Airways swings to net loss
News repors state that Jet Airways, India's top airline by market share, on Friday said it swung to a net loss, compared with a profit a year ago, hurt by rising fuel prices and a forex loss in the quarter.
For the quarter ended September, Jet Airways reported a net loss of 7.13 billion rupees for July-Sept, compared with 124 million rupees a year ago.
Total income rose to 32.93 billion rupees from 30.67 bilion. "Tough pricing environment, lean season impact and high fuel prices impacted the results," the carrier said in a statement.
11 November 2011
Air France profits down 95.2%
News reports state that Air France KLM Group reported a net profit of €14 million ($19.2 million) for the quarter ended Sept. 30, down 95.2% from net income of €290 million in the year-ago quarter, due mainly to foreign exchange losses and a decline in the fair value of hedging instruments.
Chairman and CEO Jean-Cyril Spinetta said the group’s “insufficient profitability in recent quarters, in an economic environment affected by the weak global demand and high oil prices, shows that we need to go further” despite the “many measures” pursued over the last three years.
AF KLM last month announced a shakeup of its top management, which included the return of Spinetta as group CEO and AF CEO. Spinetta said the new management will focus on three priorities: a “rapid” reduction of the company’s €6.5 billion net debt, additional cost savings, and the restructuring of its short- and medium-haul business. He declined to go into detail and said an action plan will be presented during the first quarter of 2012.
10 November 2011
Pinnancle Airlines 3rd Quarter net loss
News reports state that Pinnacle Airlines Corp., the Memphis-based parent of regionals Pinnacle Airlines, Colgan Air and Mesaba Aviation, reported a third-quarter net loss of $3.5 million, down from a net profit of $9.4 million in the year-ago quarter.
8 November 2011
SAS may struggle to make a profit with continued economic problems
News reports state that Airline SAS (SAS.ST) said the global slowdown would bite in the fourth quarter and it might struggle to make a profit in 2011, adding to gloom across the travel industry and sending shares in the flag carrier of Norway Sweden and Denmark tumbling.
The International Air Transport Association (IATA) has already warned of tough times ahead, predicting airline industry profits in 2012 will fall 29 percent to $4.9 billion from $6.9 billion this year.
SAS reported a third-quarter pretax profit below expectations on Tuesday and lowered its full year outlook slightly due to worsening economic climate.
1 November 2011
Sky Express ceases operations
News reports state that Russian authorities withdrew the air operator’s certificate (AOC) for Sky Express (XW) owing to the deterioration of its performance and finances, according to Rosaviatsia—Russia’s Dept. of Aviation/Ministry of Transport. XW was Russia’s first low-cost carrier.
27 October 2011
BMI continues to lose cash as Lufthansa consider options
News reports state that troubled carrier bmi has seen losses widen to €154 million during the first nine months of 2011 with owner Lufthansa now weighing its “strategic options” for the carrier.
bmi lost €90 million in the period in 2010, but has been hard hit by political turmoil in the Middle East where it has a strong presence.
The situation has led to suggestions of a possible sale, with Etihad Airways of Abu Dhabi, British Airways and Virgin Atlantic all mooted as possible buyers.
Christoph Franz, chief executive of Lufthansa, said: “We shall withdraw from loss-making units without a reasonable turnaround perspective.
”We have already done so in the case of Lufthansa Italia and we are currently weighing up other strategic options, among others, with bmi.”
21 October 2011
Southwest Airlines incurs a 3rd Qtr loss of $140 Million
News reports state that owing to $227 million in unrealized, noncash fuel hedging mark-downs, Southwest Airlines (SWA) incurred a third-quarter net loss of $140 million, reversed from a $205 million profit in the year-ago period. But the LCC touted a strong revenue performance and pointed out that, excluding special items, third-quarter net income was $122 million.
That was still down 37.4% from $195 million in net income on a similar basis in the 2010 third quarter. SWA noted that fuel market prices have rebounded since the Sept. 30 end of the quarter "and our future fuel hedge portfolio has gained back over $300 million in fair value."
20 October 2011
Amercian Airlines (AA) parent AMR Corp reports third quarter $162 Million net loss
News reports state that American Airlines (AA) parent AMR Corp. did little to mitigate concerns about its financial health when it reported a third-quarter net loss of $162 million Wednesday. The result was reversed from net income of $143 million earned in the year-ago period and marked the company's fourth straight negative reporting period following the rare profit in last year's third quarter.
Chairman and CEO Gerard Arpey noted that AA's quarterly fuel costs soared 30% year-over-year and told reporters and analysts that "it's no secret that the court restructuring process used by our competitors [in the previous decade] … has intensified our competitive challenge." AA has long asserted that labor cost savings achieved by other major US airlines via Chapter 11 bankruptcy restructuring (avoided by AA) have left it at a serious disadvantage.
18 October 2011
Air France ousts Chief Executive to eradicate losses
News reports state that Air France-KLM SA ousted its chief executive on Monday and recalled the chief architects of the Franco-Dutch merger with a brief to eradicate losses while preparing for an anointed successor.
Europe's largest airline by revenues, which has fallen behind peers due to a cocktail of costs, debts and competition, said after board talks that recovery and the improvement of performance would be its "top priority."
The group said it postponed plans to reorganise into a full fledged holding company, with integrated divisions, from the beginning of 2012 until 2013 and restored its tried-and-tested old guard to run things in the interim.
But it has suffered more severely than much of the industry recently because of high labour costs, a large debt and from competition that has especially affected Air France.
The group's shares have fallen almost 53 percent in the past six months, compared with a 26 percent decline for International Airlines Group (IAG) and a 35 percent drop at Lufthansa .
Although many savings were made, analysts had expressed concerns about the profitability of Air France-KLM under Gourgeon, a former military engineer with fighter aircraft qualifications who failed to keep the airline in the black.
Air France-KLM posted an operating loss of 145 million euros ($201 million) in April-June, compared with a profit of 230 million at Lufthansa and a 134 million-euro profit after exceptional items at IAG, parent of British Airways and Iberia.
13 October 2011
Kingfisher hit by oil companies stopping fuel supplies
News reports state that Flights of Kingfisher Airline were disrupted in some major cities, including Delhi, this evening after oil companies stopped jet fuel supplies to the private air carrier for non-payment of dues.
Hundreds of passengers were put to hardship after at least eight flights including one on the international sector were delayed or cancelled.
In Delhi, seven domestic flights and one international flight were disrupted, airport sources said.
The disruption caused a chaotic situation at the IGI airport here as angry passengers demanded answers from airline officials. Several passengers took flights of other airlines.
The Vijay Mallya-owned airline has been put on cash-and-carry payment option by oil companies for the past ten months.
The cash-and-carry payment system means that the payments are cleared on a daily basis for oil supplies and no credit is given.
A Kingfisher statement tonight said there was a temporary "disruption" of oil supplies leading to a "delay" of some flights due to a "minor" issue with one of the airline's Aviation Turbine Fuel(ATF) suppliers.
The matter has since been clarified and regular supplies of ATF were commenced immediately thereafter, the statement said, adding that all flights will continue to operate normally.
10 October 2011
Finnair downgrades earnings forecast
News reports state that Finnair (AY) downgraded its full-year profit guidance Thursday, predicting the 2011 second half will be “slightly negative,” owing to weak business travel. It had expected to return to profitability by the end of 2011.
Even though preliminary third-quarter results look positive, estimates indicate that fourth-quarter results will be “weaker than expected,” the company said. AY predicted year-over-year revenue growth in 2011 of more than 10%.
The downgraded earnings forecast reflects “weaker than expected pre-bookings for business travel, especially in Finland, after the end of the European holiday season,” AY said. Those bookings “are unlikely to pick up significantly during the fourth quarter due to current global economic uncertainty.” In addition, AY said the profitability of Finnair cargo traffic is declining due to decreases in both prices and demand.
7 October 2011
Airlines' 2Q earnings fall 40% to $2.3 billion
News reports state that the world's airlines posted a cumulative second-quarter net profit of $2.32 billion, down 40% from $3.71 billion in the year-ago period, IATA reported. For the first time in eight quarters, airline profits declined, with the exception of Europe, IATA said in its latest Airlines Financial Monitor released Wednesday.
Global operating profit for the second quarter ended June 30 was $3.94 billion, down 43% from $6.95 billion in the year-ago quarter, according to the report.
IATA last month predicted sluggish growth and weak profits in 2012. IATA DG and CEO Tony Tyler said that airline industry net profits should total $6.9 billion in 2011 on revenue of $594 billion, up from the previous projection of $4 billion, but well down on the $16 billion achieved in 2010.
For the second quarter, IATA said Asia/Pacific airlines posted the largest decline with a net profit of $648 million, down 56% from $1.49 billion, hardest hit by cargo weakness. By contrast, profits improved to $1.12 billion for the European airlines, up 9.4% from $1.02 billion year-over year, IATA reported.
Load factors slipped in August on most markets in the face of weaker demand, said IATA, but passenger load factors were still close to the highs of 2010. “The slippage in August and declining twin-aisle aircraft utilization suggests the challenges of maintaining favorable supply-demand conditions are growing,” IATA said.
The organization said freight markets “are increasingly challenging with falling yields and still high fuel costs increasing break-even load factors.” IATA noted the situation is better in passenger markets. “US airlines in particular have been able to raise passenger yields on international markets by around 9% so far this year,” IATA stated in the report.
6 October 2011
IATA warns of tough times ahead for Airlines
News reports state that The International Air Transport Association warned of tough times ahead for the airline industry.
IATA director general and chief executive Tony Tyler said the European Union’s carbon emission trading system would add to the financial pressures on airlines despite an offer of free permits, which he criticized as “linguistic gymnastics.”
IATA has already warned that a weak global economy would prompt a 29-per-cent fall in airline profits in 2012 and cut the industry’s profit margins to a wafer thin 0.8 per cent from 1.2 per cent this year.
“There is so much uncertainty over the world economy, obviously in Europe and United States,” Mr. Tyler said at a media briefing
4 October 2011
Avianova stops online ticket sales, facing liquidity crisis
News reports state that Russian low-cost carrier Avianova has stopped online ticket sales from Sunday and could stop flights as soon as Monday night, Moscow News reported. It said the carrier is facing “a difficult liquidity crisis” and its partners will stop maintenance of its six Airbus A320s from Oct. 3. About 70,000 passengers could face travel disruptions.
The company encountered financial problems earlier this year when its shareholders, Alfa-Group A1 (51%) and US investment fund Indigo Partners (49%), ceased funding the venture following a $1 million injection in January. At the end of 2010, A1 discovered the carrier’s losses were $20 million larger than expected. The total losses were approximately $37 million, Moscow News said, quoting sources from A1.
The carrier named Dmitri Mirgorodsky chief operations officer in December.
Airline management said it will try to find the money to compensate passengers and if there is not enough money, it will be paid out from a government program created to compensate passengers. It also has debts on lease payments for its A320s and is being sued by ILFC.
Avianova carried 866,000 passengers in the first eight months of this year and is the 12th largest Russian airline in terms of passenger numbers, according to Moscow News.
* Under the terms of IPP's Insurance cover will be excluded for this airline for all insurance / tickets bought or effected from 4th October 2011.
3 October 2011
Rosaviatsiya Airlines (KMV) ceases flying
News reports state that Rosaviatsiya, the Russian civil aviation authority revoked the operating license of Kavminvodyavia, better known as KMV, on 1 October 2011, citing the airline's failure to address concerns raised in August 2011 around the carrier's financial and economic status. KMV was the largest airline in southern Russia, operating a fleet of seven Tupolev Tu-154Ms and two Tu-204-120s from the city of Mineralnye Vody (which translates as Mineral Water!). Under plans announced in 2010, KMV had been expected to be merged, along with five other carriers owned by Rostekhnologii, the huge state owned technology holding company, into flag-carrier Aeroflot-Russian Airlines in 2010 or 2011.
22 September 2011
Air Baltic files for legal protection for Bankruptcy
News reports state that AirBaltic (BT) filed for legal protection from its creditors Wednesday and submitted a plan to the court for continued operations. The loss-making Latvian national airline is entangled in a destructive dispute between its two main shareholders, the Latvian state and Baltic Aviation Systems (BAS), the company controlled by the carrier's president and CEO, Bertolt Flick. The dispute centers on a capital injection, but is a culmination of years of tense relations and political wrangling. The Latvian state owns 52.6% of BT while BAS has 47.2%.
In a statement, Flick said that the government of Latvia, as a minority shareholder in the airline, “has neglectfully and repeatedly delayed any decisions regarding the capital increase” and that BAS has declared its willingness to cover the capital increase fully or proportionally together with the government of Latvia for the past six months. In order to come out of a stalemate, “BAS agreed to all government conditions on Sept. 16. On Sept. 20, the government again did not take a decision to participate in the capital increase of the airline, or to allow BAS to increase the capital unilaterally, but suddenly and surprisingly announced potential sale of its shares in the airline,” Flick said.
By initiating bankruptcy protection, Flick is attempting to prevent the Latvian government from interfering in airline decision making. As part of the procedure, an administrator is nominated to be responsible for the legal protection plan that all parties have to follow—including shareholders, management and the supervisory board. The administrator and the plan for continued operations must be approved by the court.
“The board of airBaltic is currently in negotiations with all the stakeholders of the airline,” Flick said. “All of them, except the government of Latvia, are ready to support the airline in the future. The legal protection plan, approved by the court, must be obeyed and will help to overcome the blockage created by the government of Latvia as a minority shareholder.” He added that the management will not change during the period of legal protection “and all the creditors of the carrier will receive the outstanding debts.”
During the first seven months of 2011, BT increased passengers carried to 1.97 million, up 7% from the year-ago period. The airline’s load factor gained 6 percentage points year-over-year, reaching 73%.
21 September 2011
IATA predicts sluggish growth, weak profits next year
News reports state that IATA has warned that the economic outlook for the airline industry has deteriorated since its June update despite the stronger-than-expected surge in the first half.
IATA DG Tony Tyler said the airline industry net profits should total $6.9 billion in 2011 on revenues of $594 billion, up from the previous projection of $4 billion, but well down on the $16 billion achieved in 2010.
“Airlines are going to make a little more money in 2011 than we thought,” Tyler said. “That is good news. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement.” But Tyler cautioned that $6.9 billion only represented a 1.2% margin. And that margin is going to get worse, Tyler warned, with the 2012 outlook for “a year of sluggish growth and weak profits,” with net profit forecast at just $4.9 billion or 0.8% on revenues of $632 billion.
Tyler said that IATA’s forecast is built around global projected GDP growth of 2.5% in 2011 falling to 2.4% in 2012.
“Airline financial performance is closely linked to the health of world economies. Whenever GDP growth has slowed below 2% the airline industry has lost money. We will be perilously close to that level at least through 2012,” Tyler said. “The industry is brittle. Any shock has the potential to put us in the red.”
Passenger demand is driving the short-term spike with numbers forecast to grow 5.9% to 2.83 billion, up from 4.4%—or 2.79 billion—projected in June.
“The strong travel trend in 2011 is built on residual confidence from economic optimism at the beginning of the year. While some economies may be more durable—China for example—the overall outlook is for a weaker end to 2011.”
Of concern, however, is that world trade basically stopped growing at the end of 2010, said Tyler, noting that airfreight, which has stagnated since the start of the year, is reflecting that slowdown in economic growth. “We have slashed full-year volume growth projection from 5.5% to 1.4%. It appears unlikely that a revival in airfreight will begin before 2012.”
Business confidence in the manufacturing sector of the major economies has fallento just above the 50-level of the index, which indicates that purchasing managers expect growth to stop, said IATA.
Tyler said that oil prices have remained consistent with the previous forecast of $110/barrel (Brent Crude). “This is 39% higher than the $79.4 average price of 2010. A total fuel bill of $176 billion is expected to account for 30% of industry costs,” Tyler said.
“There are likely to be major variations” in regional growth, said Tyler. “European airlines achieved strong growth in 2011 on international markets but the very weak economic outlook for this region is expected to limit growth in next year,” he said. However, IATA expects a solid rebound in the traffic carried by Asia/Pacific airlines with the Japanese economy expected to rebound from earthquake-damaged levels this year.
“Non-Japan Asia is forecast to continue to expand at a strong pace. Growth prospects also remain relatively strong in Latin America and the Middle East, albeit considerably down on the pace of the post-recession period,” Tyler said.
Tyler urged governments to focus on aviation policy as a key part of their economic policy and not to add more taxes to the industry.
“Governments must carefully evaluate the negative impact of the current high levels of taxation, absolutely resist increases or new taxes, and develop policies that support aviation’s growth with efficient infrastructure. Time and again aviation has shown its resilience. People need and want to travel. Now is the time to harness the economic possibilities that this presents,” Tyler said.
15 September 2011
Kingfisher Airlines needs to infuse funds to continue operations - auditor
News reports state that Kingfisher Airlines Ltd., promoted by liquor baron Vijay Mallya, needs to infuse required funds to continue as a "going concern", its auditor has said in the company's annual report for the fiscal year that ended March 31, 2011.
The auditors, B.K. Ramadhyani & Co, in its report, has mentioned that the company's accumulated losses at the end of the financial year "were more than fifty percent of its net worth".
The term "going concern" in accounting parlance refers to a company's ability to continue operations in the near future.
The annual report has been posted on the Bombay Stock Exchange website.
In late August, Kingfisher Airlines Ltd said its board had approved a rights issue of shares to raise up to 20 billion rupees ($434 million).
The company gave no timing or details of the proposed issue.
7 September 2011
Air France considers more cuts after €197 million 1Q loss
News reports state that Air France-KLM (AF) Group and AF CEO Pierre-Henri Gourgeon met with trade unions Monday to discuss potential new cost savings in light of the uncertain economic outlook, the company confirmed.
AF stressed that no specific numeric target had been discussed.
The group increased the target of its challenge 12 cost-savings program from €470 million ($664.1 million) to €500 million for the current financial year after reporting a net loss of €197 million during the first quarter ended June 30. It also said it would lower scheduled growth of its long-haul network for the winter 2011-12 schedule from 5.1% to 2.7%. The Challenge 12 hiring freeze will be extended until 2014, mainly affecting the hiring of interns and temporary workers.
“Given the current instability of the financial markets and the very uncertain economic outlook, union representatives were reminded of the need to implement the measures announced end July [at the presentation of the group’s first-quarter results],” spokeswoman Brigitte Barrand said. She added that unions were informed there “might be a need for additional cost savings.” Details would be presented to unions next month.
31 August 2011
Turkish Airlines reports a $126.4 Million second quarter loss
News reports state that Turkish Airlines reported a TRY220.6 million ($126.4 million) consolidated net loss for the second quarter, increasing its first-half loss to TRY543.6 million.
For the same quarter last year, Turkish Airlines recorded a TRY231.3 million net profit. The airline said foreign exchange losses on financial leases related to its fleet expansion activities caused the loss.
“2011 is the year for Turkish Airlines where its investment has accelerated and took a quantum leap during its eight-year growth period,” the carrier said in a statement to the Istanbul Stock Exchange. At the end of June Turkish Airlines operated 175 aircraft, 22 more than a year earlier.
Sales revenue surged 31% to TRY4.9 billion, but costs rose 45.5% to TRY4.39 billion as a result of the increased operations and rising fuel prices. Operating loss was TRY266.2 million. Unit cost in eurocents rose 2.8% to 6.32 and fuel CASK jumped 22.6% to 2.06 eurocents. Personnel CASK decreased 3 points to eurocents 1.32. The workforce grew 12% to 17,840 employees.
30 August 2011
Aegean Airlines first half loss of $28.7 Million
News reports state that Aegean Airlines (A3) reported a 19.8 million euro ($28.7 million) net loss for the 2011 first half, an improvement over the 32.6 million euro deficit incurred in the year-ago period, but warned it is heading for a full-year loss as Greek economic crisis continues to bite. Second-quarter deficit was 3.5 million euro compared to the 7 million euro loss posted in the first quarter. Revenue increased 10% to 295.2 million euro with second quarter sales increasing 24% and reversing the first quarter’s decline.
“The environment continues to be particularly challenging, with the recession in Greece and higher fuel costs leading to losses for the full year of 2011, despite productivity improvements achieved,” MD Dimitris Gerogiannis said.
30 August 2011
Virgin Australia (VA) posts a loss of $69.75 million for year end June 30 2011
News alerts state that Virgin Australia (VA) posted a loss of A$66.6 million ($69.75 million) for its fiscal year ended June 30 compared to a profit of A$21.3 million in the year-ago period. The carrier blamed natural disasters in its home state of Queensland, the radical revamp of its product and the introduction of new aircraft for the loss.
Virgin Blue and its associate airlines—V Australia and Pacific Blue—was rebranded Virgin Australia in May.
More than 50% of VA’s domestic operations are to/from or within Queensland, which was devastated by floods from late December through January and cyclone Yasi.
The result also includes an A$36 million in unrealized foreign exchange loss due to the rising Australian dollar.
“The financial year 2011 was a year of enormous challenge and significant change as we began repositioning the company to ensure a more stable financial future. Today’s financial results reflect the impact of an unprecedented series of external events and reinforce the importance of our game change program strategy to increase our share of the more resilient corporate and government markets.” CEO John Borghetti said.
25 August 2011
Air Mauritius (MK) first quarter loss $15.8 Million
News reports state that Air Mauritius (MK) posted a pretax loss for its first-quarter 2011 of €11.1 million ($15.8 million) compared to a loss of €11.3 million in the year-ago period, owing to higher fuel costs and the fragile European economy. MK warned that the highly volatile fuel prices could affect its full-year earnings.
25 August 2011
Malaysian Airlines (MAS) second quarter US$ 177 Million loss
News reports state that Malaysia Airlines (MAS) has blamed soaring fuel prices for a second-quarter net loss of MYR527 million ($177 million), similar to the MYR535 million net loss for the year-ago period, also owing to fuel prices
25 August 2011
Air New Zealand second half loss
News reports state that National carrier Air New Zealand Ltd reported a second half loss on Thursday because of disasters and high fuel prices, but said it was looking to bounce back in the coming year.
The airline has fared better than many of its competitors during tough times, but its second half earnings fell into the red through sky high fuel prices and the impact of the earthquakes in Christchurch and Japan.
22 August 2011
Royal Jordanian first half 2011 net loss of $55.5 Million
News reports state that Royal Jordanian reported a first-half 2011 net loss of JOD39.2 million ($55.5 million), deepened from a JOD7.7 million deficit in the year-ago period, owing to political and social unrest in the region, higher fuel prices and the debt crisis in several European countries.
Revenue inched up 3.5% year-over-year to JOD303.7 million on a marginal increase in passengers carried from 1.327 million to 1.399 million. The airline was forced to cancel 677 flights and merged another 80 in the period.
22 August 2011
El Al Israel Airlines second quarter net loss $19.7 Million
News reports state that El Al Israel Airlines reported a second-quarter net loss of $19.7 million, reversed from a $14.8 million net profit in the prior-year period, as expenditures grew at nearly three times the rate of revenue.
Quarterly costs amounted to $470.2 million, up 17% year-over-year. El Al said in a statement, "Most of the increase stemmed from the costs of aviation fuel, which totaled $183.5 million [up 17.9%] … The company's expenditure on jet fuel increased largely as a result of the sharp increase—about 47%—in the average price of the fuel, compared to the parallel quarter last year: from 227.4 cents a gallon to 334.6 cents a gallon."
15 August 2011
Austrian Airlines Group first half loss of €63.1million
News reports state Austrian Airlines Group reported a 2011 first-half operating loss of €63.1million ($89.8 million), slightly improved from a €68.7million operating deficit in the year-ago period. Revenue was down 0.7% to €1.02 billion.
"We had to deal with a lot of unexpected events," OS Executive Board Member Andreas Bierwirth said. Middle East unrest, the Japan earthquake, high fuel prices, currency exchange rate fluctuations and new taxes added €100million in costs to the carrier's ledger. The Lufthansa Group subsidiary said 20% of its capacity is tied to destinations hit by crisis during the 2011 first half. OS has reduced capacity to North Africa and Middle East destinations by 40%
15 August 2011
GOL 2nd quarter net loss $221.6 Million
News reports state GOL posted a second-quarter net loss of BRL358.7 million ($221.6 million), widened from a BRL51.9 million net deficit in the year-ago quarter.
Second-quarter revenue fell 1.5% year-over-year to BRL1.57 billion while expenses rose 19.8% to BRL1.84 billion, owing mainly to a 27.8% jump in fuel costs to BRL730.9 million. Traffic increased 13.4% to 7.6 billion RPKs on a 2.9% lift in capacity to 11.4 billion ASKs, producing a load factor of 66.5%, up 6.2 points.
GOL also announced it received board approval to repurchase up to 9.49 million preferred shares. The purchase will represent 10% of GOL's total preferred shares in the market.
11 August 2011
Finnair net loss of EUR 56.8 Million
News reports state Finnair reported a net loss of EUR56.8 million in the first half, a 14.7% fall, as sharp cost increases neutralised revenue gains in the period. The Finnish flag carrier stated its performance on its key Europe-Asia routes have been strong, but ongoing uncertainty stemming from Europe’s macroeconomic concerns and events in Japan, the Middle East and North Africa weighed heavily on the result.
8 August 2011
Stock market crashes threaten world airline profits
News reports state that Stock markets crashing around the world, amid renewed concerns over the potential spreading of the Eurozone debt crisis and weak US recovery, spell out a warning for the delicately poised airline industry profit hopes.
IATA has already had to twice downgrade its industry profits forecast for the year to $4 billion - less than a quarter of the $18 billion profit the industry enjoyed last year.
In making its revised industry forecast in June, IATA outlined one of the main risks to achieving the $4 billion profit was the weakening of global economic growth. Confidence in an already fragile economic picture, amid sluggish growth figures in the USA and parts of Europe, has been further hit in recent days with the dramatic stock market falls around the world and S&P downgrading the USA's credit rating
3 August 2011
Disaster aftermath pushes ANA to ¥8.4 billion June quarter loss
News reports state that still reeling from the aftereffects of March's earthquake, tsunami and nuclear crisis in Japan, All Nippon Airways incurred an ¥8.4 billion ($107.9 million) net loss for its fiscal first quarter ended June 30, widened from an ¥5.2 billion net deficit in the prior-year period.
"The losses during the period reflect the severe disruption caused by the Great East Japan earthquake in March, which resulted in a significant decline in passenger numbers," ANA stated Friday. "Despite the steady recovery of the Japanese economy during the period, the short-term outlook remains unclear due to factors including restrictions on electric power distribution, the nuclear power shutdown and a steep rise in crude oil prices."
15 July 2011
Air Southwest to cease operations
News reports state that Plymouth-based Air Southwest has announced that it will cease operations by the end of September.
The airline had previously planned to continue operations, despite the already announced closure of Plymouth City Airport.
It has cited low demand as the reason for the closure.
Flights from Newquay to Glasgow, Guernsey, Jersey and Manchester as well as all Plymouth services will end on 14th September. The rest of the airline's operations will close down by 30th September.
11 July 2011
Mat Airways ceases flying
News reports state that the Macedonian carrier suspended operations until further notice on 20 June 2011, having fallen into financial difficulties. Mat Airways' only aircraft is an owned Boeing 737-500 (reg Z3-AAM, serial 25249). Airline officials told local reporters earlier this week that the suspension was only temporary. Establsihed in 2009 as a successor to MAT Macedonian Airlines, the company is a joint venture between leading Serbian tour operator Kon Tiki Travel, the Belgrade-based Metropolitan Investment Group and Skopje-based Gomeks Financing. Regular charter services for Kon Tiki Travel were launched from Skopje and Belgrade in August 2010. It is understood that Kon Tiki has been experiencing its own financial problems and wants to concentrate on its Serbian-based operations. In April 2011, it was reported that Skywings Group, owner of the other Macedonian airline, Air Lift Service, (also known as Airlift Airlines) was acquiring 50% of MAT Airways and that the two carriers were to be merged. The status of this transaction at the time of the suspension of services is unclear.
11 July 2011
Air Cuenca suspends operations
News reports state that The Ecuadorian domestic airline, which launched services linking Cuenca with Guayaquil and Quito in August 2010, had its operations suspended by the country's civil aviation authority; Direccion de Aeronautica Civil (DAC) on 21 June 2010. Reports suggest that DAC had safety concerns after technical problems were identified with the carrier's only aircraft, a leased Boeing 737-500 (reg HC-CJB, serial 26287). It doesn't look good for the carrier, which, the week after the suspension, was ordered to leave Cuenca's Mariscal Lamar airport over a debt of $200,000 in rent and taxes owed to the airport authority. Earlier this week (2 July 2011) Triton Aviation International, owner of the 737, repossessed the aircraft and ferried it back to Miami.
7 June 2011
IATA's profit warning hits travel firms and Airlines
News reports state that shares in airlines and travel operators were down on Monday, after the International Air Transport Association (Iata) cut its profit forecast for the sector due to rising fuel costs.
Iata's 2011 profit forecast for the airline industry has more than halved to $4 billion (£2.4 billion), down 54% from the $8.6 billion profit forecast in March and a 78% drop compared with the $18 billion net profit (revised from $16 billion) recorded in 2010. On expected revenues of $598 billion, a $4 billion profit equates to a 0.7% margin.
The impact of the downgrade was in evidence on Monday, with British Airways owner International Airlines Group (IAG) down almost 3%, while the Australian and South East Asia regional airline Skywest (SKYW) was over 2.5% lower. Elsewhere in the sector, travel companies TUI Travel (TT.) and Thomas Cook (TCG) both dropped into the red.
Giovanni Bisignani, Iata's director general and CEO, said the revision was down to the natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices.
"That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance. The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel. But with a dismal 0.7% margin, there is little buffer left against further shocks," he said.
The cost of fuel is the main cause of reduced profitability for airlines this year.
The average oil price for 2011 is now expected to be $110 per barrel (Brent), a 15% increase over the previous forecast of $96 per barrel. For each dollar increase in the average annual oil price, airlines face an additional $1.6 billion in costs.
With estimates that 50% of the industry's fuel requirement is hedged at 2010 price levels, the industry 2011 fuel bill will rise by $10 billion to $176 billion. Fuel is now estimated to comprise 30% of airline costs - more than double the 13% of 2001.
"We have built enormous efficiencies over the last decade. In 2001, we needed oil below $25 per barrel to be profitable. Today, we are looking at a small profit with oil at $110 per barrel" said Bisignani.
27 May 2011
El Al first quarter loss of $42.9 million
News reports state that El Al reported a first-quarter net loss of $42.9 million, widened from a $16.5 million net deficit in the year-ago period, as a sharp rise in expenses outpaced a negligible revenue gain.
President and CEO Elyezer Shkedy noted in a statement that the average market price for jet fuel "grew by about 39% compared to the parallel quarter last year. In addition, profits were negatively affected by the evaluation of the dollar exchange rates, and by the fact that the Passover travel season was in the second quarter and not in the first as in the last year."
11 May 2011
SAS Group $59.6 Million loss first quarter
News reports state that SAS Group reported a first-quarter net loss of SEK373 million ($59.6 million), narrowed from a SEK712 million net deficit in the year-ago period. Despite the loss, SAS maintained its guidance for a full-year pre-tax profit, but it cautioned that achieving the result has become "significantly more challenging" owing to "the recent sharp increases in jet fuel prices."
First-quarter revenue fell 2.8% to SEK9.22 billion and operating loss was SEK407 million, narrowed from an operating deficit of SEK762 million in the year-ago period. SAS Group's first-quarter consolidated scheduled passenger traffic increased 3.4% year-over-year to 5.66 billion RPKs on a 7.3% lift in capacity to 8.53 billion ASKs, producing a load factor of 66.3%, down 2.5 points.
9 May 2011
Air Canada $19.7 million loss for the first quarter
News reports state that Air Canada reported a first-quarter net loss of C$19 million ($19.7 million), narrowed from a C$112 million net deficit in the year-ago period, and cut domestic capacity in the face of escalating energy expenses. The net result was helped by foreign exchange gains of C$104 million and declining unit costs, but the carrier said rising fuel prices kept it in the red.
President and CEO Calin Rovinescu stated, "In the quarter, we incurred over C$120 million in additional fuel expense from the same quarter last year. Based on expected jet fuel prices and system capacity, we estimate that these higher fuel prices will add approximately C$800 million to our operating costs in 2011."
6 May 2011
Aer Lingus chief warns of further cost-cutting
News reports state that High fuel costs, low winter demand and hard-pressed consumers have prompted Aer Lingus to caution that additional cost-cutting measures may be required at the airline to ensure that it maintains a profit trajectory.
Aer Lingus chief executive Christoph Mueller delivered the warning yesterday as the company posted a first quarter pre-exceptional operating loss of €53.7m -- nearly 42pc worse than it reported in the first three months of 2010. A €2.2m spend on IT systems during the latest period drove the total operating loss to almost €56m.
4 May 2011
Finnair posts increased losses on fuel costs
News reports state that Finnish airline Finnair reported a 55-percent rise in net losses in the first quarter on Thursday when its bottom line was battered by increased fuel costs and the crisis in Japan.
The loss rose to 33.8 million euros ($50.2 million) compared with losses of 21.8 million euros for the first quarter of 2010.
The plunge in the red was expected after the company issued a profit warning late last month -- for the second quarter running -- cautioning that the earthquake, tsunami and nuclear crisis in Japan, as well as unrest in North Africa, would hammer its results.
Finnair, which over the past two quarters has been trying to cut costs radically through outsourcing and job-cuts, said that it had been especially hard-hit by the rising price of fuel.
27 April 2011
Delta Airlines reports a quarterly loss of $318 Million
News reports state that Delta Air Lines (DAL) pronounced a sharp quarterly loss of $318 million drove by the surging fuel prices which also forced the airline operator to cut number of flights and grounded its several planes.
The decline for the quarter earnings in the period ended on March 31 resulted in to $0.38 per share. Delta had lost $256.00 million or $0.31 per share last year. Analysts expected a loss of $0.50 per share and revenue of $7.61 billion.
Airlines to face increasing fuel bill, had already raised the fares while Delta Air Lines explained that higher fares only covered 70.00% of the rise in fuel costs, which by all means not enough. The firm announced that it would cut the flights on several routes, which had not produced sufficient revenues.
The air transportation and cargo provider firm’s fuel bill went up 29.00% or $483.00 million during the first quarter as compared to a year ago. Meanwhile, higher ticket fares improved revenue by 13 percent only, to $7.75 billion.
Airlines all over the world on an average had heave fares seven times this year in order to set-off their increased fuel bills. They operated on a thin line between covering higher fuel costs and worrying away price responsive customers.
27 April 2011
American Airlines $436 Million first quarter loss
News reports state that American Airlines parent AMR Corp. on Wednesday reported a first-quarter net loss of $436 million, narrowed from a $505 million net deficit in the year-ago period, and announced a further capacity reduction in the 2011 fourth quarter.
The only US major to incur a net loss in 2010 (ATW Daily News, Feb. 21 [2]) cited high fuel costs in explaining the first-quarter red ink, but noted that its results were improved year-over-year. "High fuel prices remain one of the biggest challenges to our industry and our company," Chairman and CEO Gerard Arpey said in a statement. "While we clearly must achieve better results as we continue to strengthen our business, we have made some meaningful progress."
In a conference call with analysts and reporters, he added, "We anticipate that our total fuel bill for all of 2011 will increase by $2.1 billion over 2010, and that includes substantial benefits from hedging … Capacity must be continually and carefully considered in this environment."
To help mitigate rising fuel costs, AA said it will reduce fourth-quarter system capacity by a further 1%. AA had already lowered its full-year 2011 consolidated capacity growth projection to 3.3% from 4.3% (ATW Daily News, March 2 [3]). Now it is projecting full-year consolidated capacity to be up 2.8% over 2010. It said it will retire "at least" 25 MD-80s by year end. It expects full-year mainline capacity to be up 2.2%, 1.4 percentage points lower than originally planned. Domestic mainline capacity will be down 0.5% and international capacity up 6.2% compared to 2010, the airline stated.
15 March 2011
Air Zealand profit warning causes shares to plunge
News reports state that Air New Zealand shares are down almost 6 per cent this morning after the airline warned of a sudden downturn in demand in the wake of the Christchurch earthquake and the Japanese tsunami.
In an unscheduled earnings update the airline said it expected to lose money in the second half of the financial year to June 30, and that full year earnings were expected to be below $100 million.
10 March 2011
High oil price cuts airline profits by almost 50%.
News reports state that IATA has downgraded its airline industry outlook for 2011 to $8.6 billion from the $9.1 billion it estimated in December 2010.
This is a 46% fall in net profits compared to the $16 billion (revised from $15.1 billion) earned by the industry in 2010. On expected industry revenues of $594 billion, the $8.6 billion 2011 profit equates to a net profit margin of 1.4%.
“Political unrest in the Middle East has sent oil over $100 per barrel. That is significantly higher than the $84 per barrel that was the assumption in December. At the same time the global economy is now forecast to grow by 3.1% this year—a full 0.5 percentage point better than predicted just three months ago. But stronger revenues will provide only a partial offset to higher costs. Profits will be cut in half compared to last year and margins are a pathetic 1.4%,” said Giovanni Bisignani, IATA’s Director General and CEO.
24 February 2011
EasyJet chief warns of fresh airline failures as oil surges Premium
News reports state that EASYJET boss Carolyn McCall warned yesterday that accelerating fuel prices could force a number of airline failures this year as oil surged above $110 a barrel for the first time since 2008 yesterday as the Libyan crisis showed little sign of abating.
The rising price is spreading fears among company bosses that the high price will pump up inflation and may knock the global recovery off course.
24 February 2011
Republic Airways Holdings sinks to $13.8 million 2010 loss
News reports state that Republic Airways Holdings, parent of Frontier Airlines, Lynx Aviation, Chautauqua Airlines, Republic Airlines and Shuttle America, posted a 2010 net loss of $13.8 million, reversed from a $39.7 million profit in 2009.
18 November 2010
Viking Airlines AB files for Swedish equivalent of Chapter 11 administration
News reports state that Viking Airlines AB has filed for the Swedish equivalent of Chapter 11 administration in a bid to relaunch its UK operations next year, Travel Weekly understands.
The airline has asked creditors to accept a deal which allows it to wipe some of its debt and relaunch next year with more streamlined operations.
12 November 2010
Pontins goes into administration
News reports state that administrators have been appointed to the holiday park operator Pontin's Limited, it has been confirmed.
Pontin's has been a seaside tradition since shortly after World War II. The company employs around 850 staff across five sites in Britain at Brean Sands in Somerset, Camber Sands in Sussex, Pakefield in Suffolk, Prestatyn Sands in Wales and Southport in Merseyside.
KPMG has announced that Jane Moriarty, David Costley-Wood and Rob Croxen have been appointed as joint administrators.
5 November 2010
Gulfstream International files for Bankruptcy
News reports state that Florida airline Gulfstream International Group Inc (GIA.A) has filed for bankruptcy on to cope with debt and rising fuel costs, but said it would not affect its 150 daily flights.
The Fort Lauderdale, Florida-based airline flies to 18 destinations in Florida and the Bahamas. From Cleveland, Ohio it flies to six cities in neighbouring states.
The company said the filing would not affect its 600 employees and it would honour all tickets.
It said it would use the bankruptcy to clear the way for a fresh capital infusion.
"Gulfstream received strong interest from a number of investment sources; however, all of them noted the need to restructure the balance sheet through Chapter 11 prior to making those investments," the company said in a statement.
29 October 2010
Palmair grounded
News reports state that the Bournemouth-based operator is famed for its exceptional customer service with bosses waving off passengers personally.
But the small family company, set up in 1958, has been unable to compete with budget airlines and is selling its £8million Boeing 737.
‘These are very difficult economic times and there’s no point in pretending otherwise,’ said managing director David Skillicorn. ‘The whole industry has moved towards an obsession with low cost and the only way to get that is to strip things out.’
It has suspended winter flights to Mediterranean resorts and its 25 staff now face redundancy.
20 October 2010
Debt-hit Cyprus carrier comes to end of the line
News reports state that The board of the debt-laden Cyprus Turkish Airlines, or KTHY, decided to declare bankruptcy late Tuesday after determining all options to sell the airline to a private company had been exhausted.
In a meeting in Nicosia, the KTHY board, under the leadership of Fikret Çavuþoðlu, decided to declare “controled bankruptcy.” The board applied to a Nicosia court Wednesday.
The term refers to a process between a prepackaged bankruptcy and a court process, by persuading at least some creditors to agree to a plan for repayment of debt.
“With its known debt of $140 million, KTHY has come to the point of bankruptcy and it will be liquidated,” Anatolia news agency quoted Çavuþoðlu as saying. “There are many reasons behind this bankruptcy: management issues, the embargo due to the non-recognition of the Turkish Republic of Northern Cyprus and not making the necessary decisions in time.”
20 October 2010
Hamburg International files for insolvency
News reports state that the Airline Hamburg International has filed with the District Court of Hamburg on a request to open insolvency proceedings. Laut einer Meldung des Amtsgerichts ist der Rechtsanwalt Sven-Holger Undritz zum vorläufigen Insolvenzverwalter bestellt worden. According to a report of the district court, the lawyer Sven-Holger Undritz has been appointed provisional liquidator.
Laut dem Touristikmagazin FVW hat Hamburg International daraufhin den Flugbetrieb komplett eingestellt. According to the tourism magazine FVW International, Hamburg, then the operations set completely. Bereits seit längerem kursierten Gerüchte über finanzielle Probleme der Ferienfluggesellschaft. Have long been circulating rumors about financial problems of the charter airline. Noch bis Dienstag war jedoch lediglich bestätigt, dass die Basis in Weeze aufgegeben werden sollte. Until Tuesday, however, was only confirmed that the base should be abandoned in Weeze.
* Under the terms and conditions of IPP's policies cover is excluded for all policies and tickets purchased from today. Agents policies only provide cover if this airline was agreed and listed prior 20th October 2010.
1 October 2010
Star1 Airlines apply for bankruptcy
News reports state that the writing was on the wall for the flailing company, but now it is official: Star1 Airlines have applied to the court to file for bankruptcy.
The airline had a swath of legal claims against it in quick succession after their plane was detained last week in Dublin following a dispute between management and investors.
Airline staff and Vilnius International Airport followed close behind, registering claims against the airline.
“JSC Star Team Group being unable to continue providing funding to its wholly-owned JSC Star1 Airlines and taking into account that Star1 Airlines is unable to operate the only aircraft due to its detention in Dublin airport decided to initiate bankruptcy to JSC Star1 Airlines,” the company said in a press release.
“JSC Star Team Group, as the only shareholder of Star1 Airlines, assigned the director of the company to prepare and submit the application for initiation of bankruptcy and other relevant documents to Vilnius District Court no later than 5th October, 2010.”
“All creditors of Star1 Airlines will be informed about their claims’ submission procedures and deadlines after the application for bankruptcy is submitted to the Court,” the airline said.
Passengers who bought tickets should continue to lodge claims with the airline, though recovering funds is unlikely because of the list of creditors who come before them in bankruptcy proceedings.
The airline was given until Thursday this week to submit documents to the government proving that it could continue to operate, but since it failed to do so, it has had its licence to fly stripped.
The airline remains at Dublin airport for the time being.
* Cover is excluded for all tickets and or policies bought as from 1st October 2010
21 September 2010
Spirit Airlines
News reports state thta Spirit Airlines, the closely held Fort Lauderdale-based low-fare airline, had a net loss of $2.8 million in the first half of 2010, compared to net income of $41.5 million in the year-ago period.
13 September 2010
Merger planned for two financially troubled Cyprus airlines
News reports state that Cyprus Minister of Finance Charilaos Stavrakis confirmed Thursday the government will conduct a feasibility study to merge Cyprus Airways, which is 69% owned by the state, with charter subsidiary Eurocypria Airlines. The study follows CY reporting a half-year loss of €25.5 million ($32.4 million).
13 September 2010
Virgin America posts $15.5 million second-quarter loss
News reports state that Virgin America reported a second-quarter net loss of $15.5 million, improved 1.6% from a $15.8 million deficit in the year-ago period, on a 35.7% rise in revenue to $184.4 million. Pointing to the carrier's $430,000 operating loss for the period, significantly narrowed from a $5.3 million operating loss last year.
3 September 2010
La Manga specialist Barwell Travel blames failure on strong euro
News reports state that a British tour operator specialising in holidays to the Spanish sports resort of La Manga - a favourite training destination for professional sports stars - has gone bust leaving customers with forward bookings to cover their own costs.
Barwell Travel, which owned the website address lamanga.com, ceased trading on Tuesday according to a notice posted on the firm's website.The company is blaming the strength of the euro for the demise and airlines' preference for flying to cheaper destinations.
3 September 2010
Malev receives $25.5 million emergency government loan
News reports state that Troubled Malev received a HUF5.7 billion ($25.5 million) loan from the Hungarian government Thursday, according to multiple news reports. Hungary's National Development Ministry, which officially extended the loan, told Reuters that "Malev's situation would have become almost unsustainable" without the financial help.
The announcement of the loan came shortly after Figyelo, a Hungarian business publication, reported that the airline was unable to make aircraft lease payments owed to ILFC.
2 September 2010
Arik Airline Grounded Over Debt
News reports state that hundreds of air travellers have been stranded at the General Aviation Terminal (GAT) and the Murtala Muhammed International Airport (MMIA) in Ikeja Lagos, South West Nigeria this week, after the National Airspace Management Agency (NAMA) grounded the Arik Air over unpaid debt.
NAMA instructed heavily indebted airlines to pay years of debt or be grounded. The agency approves flight plans filed by airlines and can deny same to some airlines.
1 September 2010
JAL files aggressive restructuring plan
News reports state that Japan Airlines has unveiled a more radical restructuring plan than expected, calling for the retirement or layoff of more than 16,000 staff by March 31, 2011, as well as the disposal of 103 aircraft and the scrapping of 49 loss-making routes.
The company outlined its ambitious reorganization plan aimed at achieving a profit margin of 9.2% by March 2013 in a filing with the Tokyo court overseeing its bankruptcy case under Japan's Corporate Rehabilitation Law.
28 August 2010
Mexicana stops flying
News reports state that current management received the company in a state of technical bankruptcy seven days ago after it filed for protection under Mexico's insolvency laws
Financial deterioration and lack of agreements force Grupo Mexicana to stop flying
Grupo Mexicana deeply regrets any inconvenience caused to passengers
Nuevo Grupo Aeronáutico, S.A. de C.V. ("Grupo Mexicana") announced this morning that as a result of the group's delicate financial situation when it changed owners a week ago, compounded by failure to reach agreements that would allow for the capitalization of its three airlines, Mexicana Airlines, MexicanaClick and MexicanaLink flights will suspend operations until further notice as of midday (12:00 p.m.) on Saturday, August 28, 2010.
Among the factors that have contributed to this announcement are:
1. Grupo Mexicana's fragile financial situation, which has deteriorated
further over the last four weeks due to the previous management's
decision to suspend ticket sales, forcing the company to continue
operating in the interests of passengers without receiving any revenue.
2. No substantial agreements were reached to give companies in the Group
long-term viability.
3. Lack of effectiveness in the insolvency (Concurso Mercantil) process
intended to protect additional financial resources available to the
company so it could to continue operating.
4. Given the uncertainty of the situation, certain suppliers have begun
demanding advanced payment of services that are essential to the
airlines' operations.
Today's decision is a painful one for the 8,000-strong Grupo Mexicana family, but we will continue seeking out ways of securing the company's long-term financial viability, so our passengers can once again enjoy the quality services they are accustomed to. We hope to be back in the air soon and would like to thank everyone involved in this process for their support and understanding.
If you have bookings or/and have paid for a Grupo Mexicana flight and have a reservation code, we would like to inform you that:
1. All Mexicana, MexicanaLink and MexicanaClick flights will be suspended
until further notice as of midday on Saturday, August 28, 2010. All
flights programmed to depart after this hour will be canceled.
2. Grupo Mexicana deeply regrets any inconvenience this decision may cause
and will continue to assist passengers to the full extent of its
abilities. Passengers who have already flown a leg of their journey and
who are scheduled to fly with a Grupo Mexicana airline after Saturday,
August 28, 2010 are advised to consult the websites or contact us at the
numbers listed below. Priority will be given to minors traveling
unaccompanied, passengers traveling with children under age 3 and
special needs passengers.
3. If you have not yet begun your journey, we recommend you make
alternative travel arrangements.
4. For information on how to apply for a refund, visit www.mexicana.com or
www.cmainforma.com or contact us at any of the numbers listed below:
Mexico City
5448-8634
5998-5998
Elsewhere in Mexico
01 800 837 6150
01 800 801 2010
United States and Canada
1 877 801 2010
1 888 882 9994
27 August 2010
Aer Arran in bankruptcy protection
News reports state that the Irish regional airline, Aer Arran, has entered a bankruptcy protection process after suffering losses of 18m euros since 2008.
The High Court in Dublin has appointed an interim examiner to the airline. That is a process of Irish company law which protects a firm from its creditors while it comes up with a restructuring plan.
The company, which employs 320 people, said the move would not affect day-to-day business. Aer Arann added that there would be no impact on customer travel or bookings.
The decision of the company's board to apply for examinership followed two years of loss-making trading.
It said the airline had been on budget for this year, but was badly affected by the disruption caused by volcanic ash from Iceland.
The airline lost around 6m euros in both 2008 and 2009. Losses of 6m euros have been incurred so far this year.
26 August 2010
IATA: Strong demand continues as recovery slows
News reports state that IATA reported yesterday that both international passenger and cargo traffic demand were strong in July but warned that air transport markets have moved into a slower phase of growth.
July international passenger traffic (RPKs) rose 9.2% year-over-year and air freight (FTKs) was up 22.7%. However, the pace of growth decelerated compared to June's 11.6% increase in passenger demand and 26.6% surge in airfreight, "a clear indication that recovery has entered a slower phase," according to the report.
"The recovery in demand has been faster than anticipated," said DG and CEO Giovanni Bisignani. "But, as we look toward the end of the year, the pace of the recovery will likely slow. The jobless economic recovery is keeping consumer confidence fragile, particularly in North America and Europe. This is affecting leisure markets and cargo traffic."
24 August 2010
Saudi's Sama Airlines Says Temporarily Suspending Operations
News reports state that Saudi Arabia-based low-cost carrier Sama Airlines said in a statement Sunday that it is temporarily suspending operations after it failed to obtain financing from investors or government support.
The company didn't say when it would resume operations.
Earlier a spokesman for the kingdom's civil aviation regulator had said the airline plans to stop its services this week after facing losses.
Sama launched operations in 2007. Prince Bandar Bin Khaled Bin Faisal is chairman of Sama, which competes with state-owned Saudi Arabian Airlines and low-cost carrier National Air Services.
** Note that under the terms of IPP's policies cover is excluded for this airline for all tickets / policies issued on or after 24th August 2010 until further notice
23 August 2010
Malaysian Airlines second quarter $170.4 Million loss
News reports state that Malaysia Airlines last week reported a second-quarter net loss of MYR533.6 million ($170.4 million), reversed from a MYR875.7 million profit in the year-ago quarter, blaming the result on a spike in fuel costs.
The carrier's second-quarter fuel expenses lifted 44% year-over-year to MYR1.1 billion. It said the average per barrel price of jet fuel during the three months ended June 30 was $89.7, up 35.5% compared to $66.7 in the year-ago quarter. MD and CEO Azmil Zahruddin said the fuel cost rise "wiped off operational gains" made by the carrier during the quarter, including a 26% year-over-year increase in revenue to MYR3.2 billion. "The volatility of the fuel price remains a key challenge for the industry," he said.
MAS also endured a mark-to-market fuel hedge loss of MYR217 million in the quarter. It said it is 60% hedged at $100 per barrel for the rest of 2010 and 40% hedged at $100 for 2011.
19 August 2010
Aegean suffers €32.6 million first half loss
News reports state that Aegean Airlines reported a net loss of €32.6 million ($42 million) for the 2010 first half, citing the deteriorating Greek economy, a €6.6 million extraordinary social contribution charge and “overcapacity prevailing in certain markets.”
19 August 2010
SAS incurs $69 million second quarter loss, blames April airspace closures
News reports state that SAS Group's SEK502 million ($68.6 million) second quarter net loss, more than halving its SEK1.05 billion loss in the year-ago period, was attributable to the volcanic-ash-related airspace closures in April that cost it SEK790 million in lost revenue, the airline company said yesterday.
17 August 2010
Kiss Flights & Flight Options collapse
News reports state that London-based travel company Flight Options Limited, trading principally as Kiss Flights, ceased trading this evening, and the Civil Aviation Authority (CAA) has stepped in to protect holidaymakers.
The CAA estimates that around 13,000 people are currently overseas – all of them will be able to complete their holidays and return to the UK due to the CAA’s ATOL protection.
Around 60,000 people have forward bookings with the company and should be able to claim a full refund for the ATOL-protected elements of their holiday from the CAA. Because the company has failed at the height of summer, the CAA is also putting in place arrangements to allow people to travel out on their holidays for the next 24 hours, to minimise confusion and protect passengers.
Flight Options sold charter flights to Mediterranean destinations, under ATOL 4233 mainly through travel agents. The CAA will be arranging repatriation for all Flight Options customers in line with the scheduled end of their holiday.
For more information visit :
http://www.caa.co.uk/application.aspx?catid=14&pagetype=65&appid=7&newstype=n&mode=detail&nid=1909
16 August 2010
Korean Air slides to second quarter loss
News reports state that Korean Air posted a second quarter net loss of KRW233.1 billion ($197 million), reversed from a KRW78.5 billion profit in the year-ago period, blaming the negative swing in part on a 30% year-over-year surge in fuel costs and the falling value of the won.
12 August 2010
ExpressJet second quarter deficit widens to $18.5 million
News reports state that ExpressJet Holdings posted a second quarter net loss of $18.5 million, widened from a $13.1 million deficit in the year-ago period, and said it will continue to make an effort to reduce operating costs as it prepares to be acquired by SkyWest, Inc.
11 August 2010
Theme Park Tickets Direct goes bust
News reports state that ThemeParkTicketsDirect.com, based in central London, ceased trading this week meaning it will not dispatch any more tickets.
It was an agent for attractions worldwide but was particularly popular for those booking Disney days out.
The news will be a particular blow to families with theme park plans during what is now the peak summer holiday period.
However, those who booked tickets that cost over £100 on a credit card, or on a Visa card for any amount, should urgently try and claim a refund.
11 August 2010
Finnair's second quarter loss widens
News reports state that Finnair reported a second-quarter net loss of €27.8 million ($37 million), widened slightly from a €23.3 million deficit in the year-ago-period. “Strengthening demand, recovering load factors and clearly improved unit revenues have restored profitability to a positive course," President and CEO Mika Vehvilainen said. "It is clear that we cannot be satisfied with a loss-making result, but the trend in profitability is heartening."
11 August 2010
GOL Airlines US$30 Million loss
News reports state that Gol reported a second quarter net loss of BRL51.9 million ($29.6 million), reversed from a BRL353.7 million net profit in the year-ago period, as interest expenses, foreign exchange losses and non-recurring maintenance costs weighed on the bottom line.
Quarterly interest expenses totaled BRL81.3 million while foreign exchange losses were BRL29.9 million "mainly due to the impact of the 1.2% appreciation of the dollar on the company's foreign currency debt," Gol said. That was a considerable reversal from foreign exchange gains of BRL448.4 million in the year-ago period on a 15.7% appreciation of the real against the dollar.
6 August 2010
Air Canada sinks to second-quarter loss on charge, foreign exchange losses
News reports state that Air Canada reported a second-quarter net loss of C$203 million ($198.7 million), reversed from a C$155 million profit in the year-ago period, despite being profitable on an operating level.
4 August 2010
Mexicana files for creditors' protection in Mexico & US
News reports state that Mexicana Airlines filed for protection from creditors in Mexico and the US late Monday, conceding in a statement that its "financial and labor situation is no longer sustainable."
It said it filed a "voluntary petition to commence a case under the Mexican Business Reorganization Act" and has also filed for Chapter 15 bankruptcy protection in the US. Most of the aircraft operated by the airline are leased and court protection is needed to prevent the seizing of those assets. The company said it plans to continue operations
30 July 2010
Grupo Mexicana de Aviacion
News reports state Grupo Mexicana de Aviacion, Mexico’s biggest airline by passengers, said its financial situation is “critical” and the company will present shareholders with proposals to keep the carrier operating.
Executives and investors held an extraordinary meeting today in Mexico City to review the airline’s “difficult” financial circumstances, and couldn’t decide on whether to file for bankruptcy, said Adolfo Crespo, a Mexicana spokesman.
“The company is analyzing all options and resources,” said Crespo said, who declined to elaborate on the airline’s finances. Mexico City-based Grupo Posadas SAB bought Mexicana from the government in 2005.
The discussions came a day after lessor Air Canada seized two planes in what Mexicana called a misunderstanding. Mexico City’s El Universal newspaper reported yesterday that Mexicana told its pilot and flight attendant unions it was considering bankruptcy, a sale to the labor groups or an operational restructuring plan.
* Cover is excluded under the terms of all IPP's policies for cover effected or tickets issued on or after 30th July 2010.
30 July 2010
Lufthansa incurs €104 million first-half loss
News reports state that Lufthansa Group reported a first-half 2010 net loss of €104 million ($135.2 million), narrowed from a €178 million deficit in the year-ago period, but noted that it was profitable on an operating basis during the second quarter.
In a preliminary earnings statement released yesterday, LH blamed the six-month loss on a "severe winter, the strike by the pilots union, the airspace lockdown after the volcano disruption and the continued slump in prices."
21 July 2010
Goldtrail / Quickstep Adminstrators website
Goldtrail’s administrators have created a dedicated website to offer advice and updates to agents and customers affected by the company’s demise.
Begbies Traynor has launched the site,
www.goldtrail-insolvency.com , which will offer progress reports on the administration of the Turkey and Greece specialist operator that folded on Friday, July 16.
20 July 2010
Air Pacific loses big
News reports state that Qantas' hopes to sell its Air Pacific shares have been dampened as the Fijian carrier announced last financial year as the worst in its history.
Air Pacific reported last week a net loss of FJD65.3 million for the year to March, a marked contrast to the FJD12.5 million loss from a year earlier.
"While much of the 2009/10 losses were due to lower fares caused by increased competition, the impact of the global financial crisis and fuel hedging losses, last year's results are clearly unacceptable," Air Pacific chief executive Dave Pflieger said.
17 July 2010
Goldtrail Travel Ltd collapses stranding 16,000 people abroad
News reports state that a British tour operator collapsed leaving thousands of holidaymakers abroad, the Civil Aviation Authority has confirmed.
CAA is taking steps to get travellers home
Greece and Turkey specialist Goldtrail Travel Ltd went into administration at about 4pm on Friday, with an estimated 16,000 people overseas.
The CAA said it was making arrangements to fly customers home at the end of their holiday under its ATOL (Air Travel Organiser's Licensing) scheme.
The CAA said the majority of flights home from Turkey will operate as normal.
But holidaymakers in Greece were warned to expect changes to flights and are advised to check with representatives at local airports.
The CAA said there were no more outbound Goldtrail flights. It advised customers due to fly with the failed operator to check with their travel agent before leaving for the airport. Goldtrail, trading as Goldtrail Holidays, Goldtrail Travel and Sunmar, was based in New Malden, Surrey.
The firm operated flights and holiday packages from many UK airports to Turkey and Greece. It sold mainly through travel agents.
CAA:-
Customers in the UK: 0844 856 2585
Customers overseas: 0044 203 441 0846
See following link for further questions and answers:-
http://www.caa.co.uk/docs/2036/GoldtrailPax_Q&A.pdf
* Goldtrail Travel is classed as a tour operator, not an airline therefore policy holders with IPP's financial failure insurance should refer to the CAA for assistance as this risk is very likely covered by them seperately.
15 July 2010
Norwegian swings to $21 million second-quarter loss
News reports state that Norwegian Air Shuttle reported a second-quarter net loss of NOK134 million ($21.2 million), reversed from a net profit of NOK180.2 million in the year-ago period, and stated that the result "was strongly influenced by the authorities' closing of the European airspace this spring" owing to volcanic ash. CEO Bjorn Kjos said, "By irregularly opening and closing the airspace, the authorities contributed to an uncertainty among our passengers that has resulted in decreased demand.
1 July 2010
JAL to Seek Lenders' Aid
News reports state that less than six months after Japan Airlines filed for the country's biggest nonfinancial bankruptcy restructuring, with a debt load of $25 billion, the carrier said its financial condition has worsened, and it plans to ask its lenders for more assistance in talks that begin on Thursday.
The struggling airline said that its negative net worth had swelled to one trillion yen (11.3 billion dollars), beating its earlier estimate of liabilities that exceed assets.
29 June 2010
Turkish Cyprus airlines, Atlasjet reach final deal
News reports state that Turkish Cypriot national airlines (KTHY) and a private Turkish air carrier (Atlasjet) have reached an agreement on 50-50 profit sharing for five years.
Prime Minister Irsen Kucuk of the Turkish Republic of Northern Cyprus (TRNC) told a news conference that they succeeded in overcoming the problems in partnership talks. "A new era has begun for the KTHY. After establishment of the new company, the KTHY will begin flying as the 'New Cyprus Turkish Airlines'. This is a 50-50 profit sharing agreement and a 51:49 joint venture," he said.
"The flights will begin in May 2011 the latest. Till then, all flights will be held with the Atlasjet fleet and under the title of 'Cyprus Turkish'," he said.
28 June 2010
Atlasjet suspends bailout plan with Turkish Cypriot Airlines
News reports state that Atlasjet, an airlines company from Turkey said its suspended partnership talks with Turkish Cypriot Airlines (KTHY), the financially troubled national aircarrier of Turkish Republic of Northern Cyprus.
Atlasjet said in a statement that the bail out plan was bound to fail as administrators and staff was not fully cooperating.
It said as soon as they reached an agreement for partnership they initiated works to manage and structure the 100 million USD debt of the company, noting however that KTHY personnel was not cooperating and allowing Atlasjet to access documents and info on the debts of the company.
The company said even though the operating license of KTHY was suspended by the Northern Cyprus Civil Aviation Authority for three months, they took all risks on a bid to rescue the airline company, adding that they had no choice but to suspend the partnership talks as the administrators and the personnel of the company refused to cooperate.
Meanwhile Acting Director General of KTHY Selim Altincik resigned earlier today.
The civil aviation authority of the TRNC has suspended all flights conducted by KTHY and suspended its operation certificate last Tuesday.
25 June 2010
Virgin America posts $35.5 million first-quarter loss
Virgin America reported a first-quarter net loss of $35.5 million, narrowed from a year-ago deficit of $40.3 million, but said it remains on track for a full-year operating profit.
9 June 2010
Air Zim making $2mil monthly loss
News reports state that AIR ZIMBABWE boss Peter Chikumba says the airline is making a monthly loss of nearly US$2 million and faces collapse unless government finds a strategic partner to help restructure the business.
Chikumba told the parliamentary portfolio committee for communication and infrastructural committee that the airline was incurring monthly operational costs of US$6 million against revenues of US$4.5 million.
He said the airline – which is owned 100 percent by government – needs to find a strategic partner to help retire its huge debts and recapitalise its operations.
7 June 2010
Brussels Airlines incurs €39.8 million 2009 loss
News reports state that Brussels Airlines posted a net loss of €39.8 million in 2009, dramatically widened from a €6.8 million deficit in 2008, according to Belgium's Central Balance Sheet Office. Total revenue fell 16.1% to €849.2 million while operating costs decreased just 8.3% to €922.4 million. Operating loss came in at €73.1 million, reversed from a positive EBIT of €4.7 million the prior year.
5 June 2010
Sun Country Airlines files for bankruptcy
News reports state that Another airline has filed for bankruptcy. This time it’s discount airline Sun Country (Web site: www.suncountry.com) and the filing is for Chapter 11. In this instance, the Minneapolis/St. Paul-based carrier says it will continue flying.
Under the terms of IPP's insurance cover for this ariline is excluded for all tickets and policies purchased from 5th June 2010.
2 June 2010
Fly Direct placed into liquidation
News reports state that Fly Direct Ltd, a company which heavily marketed direct flights to Wanaka from Christchurch and Wellington for the ski season, has collapsed before it got off the ground.
Companies Office records show the company has been placed in liquidation. Damien Grant of Waterstone Insolvency is handling the liquidation. A message on the company's website also advises of the liquidation.
2 June 2010
Virgin Blue ratchets down earnings expectations
News reports state that Virgin Blue Group advised the Australian Stock Exchange of sharply lowered earnings expectations for its fiscal year ending June 30, blaming in part fares that have fallen by 10% in the past month.
30 May 2010
Kingfisher Airlines incurs further losses
News reports statet that private air-carrier Kingfisher Airlines today posted a loss of Rs 1,647 crore for 2009-10 fiscal mainly due to grounded aircraft, premature termination of aircraft lease and foreign exchange losses.
The airline had incurred a loss of Rs 2,140 crore in the previous fiscal.
28 May 2010
Aegean slips to first-quarter loss
News reports state that Aegean Airlines reported a first-quarter net loss of €25.6 million, reversed from a €4.6 million net profit in the year-ago period, despite a 3% hike in revenue to €114.8 million and a 17% jump in boardings to 1.4 million.
The €29.5 million operating loss compared with a breakeven result last year.The Athens-based carrier, which is in the process of merging with competitor Olympic Air, attributed the loss to a gradually deteriorating demand environment, the rise in fuel prices, increased domestic competition that resulted in “significantly lower average revenue per flight” and the negative contribution of new international routes to Madrid, Vienna, Belgrade and Tel Aviv.
27 May 2010
Iraqi Airways to be closed following bankruptcy
News reports state that the Iraqi government has said it will close the state-owned Iraqi Airways after declaring it bankrupt. All scheduled Iraqi Airways flights have been cancelled.
21 May 2010
British Airways in record £531m loss
News reports state that the flag carrier lost £531m ($766m) in the 12 months to March - BA's biggest loss since it was privatised in 1987.
That adds to the £401m it lost in the 2008-9 financial year, but is less than the £600m loss many analysts feared.
Strike action is expected to further hit BA's finances British Airways has reported its biggest annual loss due to lower passenger numbers, higher costs and the impact of strike action.
20 May 2010
Air France KLM sinks to €1.56 billion fiscal-year loss
News reports state that Air France KLM Group reported a heavy net loss of €1.56 billion ($1.93 billion) for its fiscal year ended March 31, nearly double its €814 million deficit in the prior year, but management reiterated that it believes a breakeven operating result is possible in the current financial year excluding the impact of pre-2009 fuel hedges and subject to costs related to the closure of European airspace owing to volcanic ash.
The group estimates that the Icelandic volcano-related disruptions April 15-21 caused €260 million in lost revenue with a €160 million impact on its operating result.
CEO Pierre-Henri Gourgeon said, "2009-10 will go on record as our 'annus horribilis.' The global economic crisis had a profound effect on the entire airline industry. In addition, Air France KLM had to contend with the tragedy" of the A330-200that crashed last May 31, killing 228 (ATWOnline, May 7 [2]). Results for FY2009-10 include a negative impact of €637 million linked to pre-2009 fuel hedges.
Revenue fell 15% year-over-year to €20.99 billion including a 13.6% decline in passenger revenue to €16.27 billion. Total operating expenses dropped 14.8% to €13.24 billion. Operating loss deepened to €1.28 billion from €186 million in the prior year.
Passengers carried dipped 4.1% to 71.4 million and RPKs fell 3.2% to 202.5 billion on a 4.3% cut in capacity to 251.1 billion ASKs. Passenger load factor improved 1 point to 80.7%. Yield was down 10.8% on the previous year to €0.0765 and RASK decreased 9.7% to €0.0615. CASK slid 4.6% to €0.0646.
14 May 2010
Ghana International Airlines (GIA) shuts down operations
News reports reaching Asempa News indicate that workers of Ghana International Airlines (GIA) have been asked to go home until further notice.
This is the latest after a series of flights were cancelled owing to contractual agreements between GIA and its partners in the United Kingdom and the recent volcanic eruption in the Iceland.
* Under the terms of IPP's policies cover is excluded for this airline with immediate effect for policies or tickets issued from the date of this report.
13 May 2010
Cyprus Turkish Airlines faces bankruptcy
News reports state THE NORTH’S Cyprus Turkish Airlines (KTHY), faces possible bankruptcy after the company that maintains its aircraft sent in bailiffs to seize US$12 million worth of outstanding debts.
The move came on Monday, when Turkish Technics, a Turkish-based maintenance company linked to the Turkish national carrier Turkish Airlines (THY), called in a long-standing debt, affectively freezing KTHY’s assets.
* Under the terms of IPP's policies cover is excluded for this airline with immediate effect for policies or tickets issued from the date of this report.
12 May 2010
EasyJet narrows FY first-half loss, expects big volcano impact
News reports state that EasyJet narrowed its net loss for its fiscal year first half ended March 31 to £58.9 million ($87.9 million), a 31.4% improvement over an £85.9 million deficit in the year-ago period, but lowered its profit expectations for the full year ending Sept. 30 owing to volcanic ash-related airspace closures.
7 May 2010
Air Canada reports C$85 million loss
News reports state that Air Canada reported a first-quarter net loss of C$85 million ($82.7 million), narrowed from a C$400 million deficit in the year-ago period, and said the improvement was helped by foreign exchange gains and rebounding passenger and cargo traffic.
President and CEO Calin Rovinescu cautioned that "yields remained under pressure…This is still a fragile industry."
6 May 2010
Republic Airways sinks to $36.5 million first-quarter loss
News reports state that Republic Airways Holdings' acquisition of Frontier Airlines and Midwest Airlines in 2009 helped drive an 87.1% surge in its 2010 first-quarter revenue to $608.7 million, but costs associated with rebranding the carriers under the single Frontier brand contributed to a net loss of $36.5 million, reversed from the year-ago profit of $2.2 million. Operating expenses increased 124.1% to $628.7 million including "an $11.5 million, noncash impairment to write off the Midwest Airlines trademark," it said. It added that severe winter storms in the Northeast US had an estimated $7.5 million negative impact on pre-tax results. Operating loss for the quarter was $20 million, reversed from last year's profit of $44.8 million.
5 May 2010
Aer Lingus reports first quarter pre-tax loss of €36.2 million
News reports state that Aer Lingus almost halved its first-quarter pre-tax loss to €36.2 million ($47.9 million) from a €67.9 million deficit in the year-ago period.
Quarterly revenue declined 1.8% but operating costs fell at a much higher rate of 13.3% owing to lower staff costs and a 42.6% reduction in fuel costs. Consequently, operating loss before net exceptional items dropped 49.5% to €37.8 million from €74.8 million last year.
5 May 2010
Lufthansa first-quarter loss widens to €298 million
News reports state that Lufthansa reported a first-quarter net loss of €298 million ($393.9 million), widened from a €267 million deficit in the year-ago quarter, but said it is seeing "positive demand trends in the cargo and passenger businesses."
First-quarter revenue lifted 16% to €5.8 billion and operating loss was €330 million, significantly widened from a €44 million operating deficit last year
4 May 2010
ANA sinks to $616 million year loss
News reports state that ANA reported a net loss of $616 million for its fiscal year ended March 31, significantly widened from a $45 million deficit in the prior fiscal year, and warned that "conditions for the aviation industry remain severe" despite a "steady [economic] recovery from the global recession."
Executive VP Tomohiro Hidema said, "In the midst of the global recession brought on by the financial crisis in the US, aviation demand also dropped due to the effects of H1N1 influenza in the first half of the [fiscal] year. These factors brought on an extremely harsh business environment at a level of severity we've never seen before."
30 April 2010
All Nippon Airways Posts Wider Loss
News reports state that All Nippon Airways Co. losses widened in its fiscal fourth quarter due to fierce competition amid a travel slowdown. But the airline forecast that stringent cost-cutting and improved international flight revenue would help it return to profitability this fiscal year for the first time in three years.
29 April 2010
ExpressJet Airlines reports first-quarter loss
News reports state that ExpressJet Airlines parent ExpressJet Holdings reported a first-quarter net loss of $16.1 million, widened from an $11.4 million deficit in the year-ago period, and said the "disappointing" results were driven by "seasonally lower flight activity, cancellations and delays caused by severe winter weather in the [US] Northeast and Midwest, cost increases that outpaced revenue growth and record-low attrition."
29 April 2010
JetBlue drops to first-quarter loss
News reports state that JetBlue Airways reported a first-quarter net loss of $1 million, down from a profit of $12 million in the year-ago period, and said it is "taking the right steps to return to sustained profitability."
The airline said its results were hindered by poor weather and costs associated with implementing its new reservations system.
28 April 2010
Air Pacific substantial loss
Fiji’s national airline Air Pacific is flying towards a substantial loss of more than FJD12.5million (about USD6.4 million) for the financial year ending 31 March 2010, according to reports from Fiji.
The Fiji Times said outgoing managing director and chief executive John Campbell forecast a better financial return, possibly a small profit, in the current business year. The airline was still going through its accounts and financial reconciliation, according to the paper, but Campbell has made it clear that “it’s going to be a very substantial loss”.
Campbell attributed the loss largely to the floods of 2009, the devaluation of the Fiji dollar and airfare discounts to help stimulate the market, the paper said.
The Fiji news website Fiji.village.com quoted Campbell as saying the biggest challenge now was competition from other airlines serving Fiji. He said total passengers carried by Air Pacific had doubled over the past nine years. In 2001 the airline carried just over 415,000 passengers and the annual total now stands at over 1 million.
28 April 2010
US Airways narrows first-quarter loss
News reports state that US Airways reported a first-quarter net loss of $45 million, narrowed from a $103 million deficit in the year-ago period, and touted a continuing "rate
28 April 2010
United reports $82 million first-quarter deficit
News reports state that United Airlines parent UAL Corp. posted a first-quarter net loss of $82 million, significantly narrowed from a $382 million deficit in the year-ago period, and noted that it was profitable on an operating basis for the first time in a year's initial reporting period since 2000.
27 April 2010
JAL recovery looks gloomy
News reports state that Dark clouds loom over the ongoing rehabilitation efforts by Japan Airlines, which is restructuring under bankruptcy protection.
The struggling major carrier is likely to extend a June 30 deadline for submission of its rehabilitation plan to the Tokyo District Court by about two months.
As the rehabilitation plan has gradually taken shape, a number of prefectural governments with local airports to which JAL has decided to scrap flight services have voiced their opposition.
"Even if submission of the [restructuring] plan is delayed, there is no fear of a second bankruptcy," Land, Infrastructure, Transport and Tourism Minister Seiji Maehara said at a House of Representatives transport committee meeting last week.
With this comment, Maehara dispelled any concern over the possibility of a second bankruptcy, which would mean liquidation of the airline company. At a similar meeting the week before, lawyer Shinjiro Takagi, who led the task force charged with JAL's rehabilitation, revealed that JAL's restructuring process would be delayed.
While calls for further cuts in flight routes to improve profitability have steadily increased, JAL Chairman Kazuo Inamori countered that he could not imagine JAL without international routes.
27 April 2010
JAL could miss deadline for restructuring plan
News reports state thta Debt-ridden Japan Airlines Corp (JAL) could miss its June-end deadline for submitting a rehabilitation plan by as much as two months as it deals with local governments opposed to flight cuts, the Nikkei said.
The struggling airline's main lenders have said they will not recommence lending unless the company drastically revamps unprofitable flight operations in the restructuring plans to be drawn up by the end of June.
The new framework has scrapped plans to consolidate flights serving Central Japan International Airport at Nagoya airport and flights between Kansai International Airport and Bangkok, leaving the airline's flight restructuring mostly unchanged from earlier March-end, the paper said.
27 April 2010
Ritz-Carlton hotel at Lake Tahoe goes into default
News reports state that The new Ritz-Carlton luxury hotel at Lake Tahoe has gone into default, the latest sign of trouble for the lake economy and one of its top developers.
The default notice is the first step toward possible foreclosure. It was filed against the Northstar-area hotel March 31, about a month after its developer, East West Resort Development of Avon, Colo., put nearly $1 billion worth of Northstar real estate development into bankruptcy reorganization.
26 April 2010
Vueling posts €6.3 million first-quarter lo
News reports state that Vueling Airlines reported a €6.3 million ($8.4 million) first-quarter net loss, on par with the deficit it posted in the year-ago quarter as a standalone company, despite a 90% rise in revenue to €141.8 million. Vueling merged with Clickair in July 2009.
23 April 2010
Norwegian Air Shuttle reports first-quarter loss but touts strong traffic growth
News reports state that Norwegian Air Shuttle reported a NOK199.1 million ($33.7 million) first-quarter net loss, sharply higher than the NOK109.6 million deficit it posted in the year-ago quarter.
23 April 2010
Continental loses $146 million in first quarter, says economy rebounding 'slowly'
News reports statet that Continental Airlines reported a first-quarter net loss of $146 million, slightly widened from a $136 million deficit in the year-ago quarter, and cautioned that the economic recovery is still in its "early stages."
"Business travel is indeed coming back, but it's coming back slowly," CO Chairman, President and CEO Jeff Smisek said, explaining that it is still "uncertain" whether business passenger levels will recover fully.
22 April 2010
Winter storms drive AirTran to $12 million first-quarter loss
News reports state that after leading US majors with a $134.7 million 2009 profit, AirTran Airways slipped to a $12 million net loss in the first quarter owing to higher fuel costs and severe winter weather that disrupted operations during the period.
The deficit was a reversal from a $28.7 million profit in the year-ago quarter. "This winter proved to be one of historic inclement weather for much of the East Coast and particularly for some of our busiest operations like Baltimore/Washington and Atlanta," Chairman, President and CEO Bob Fornaro said.
He also noted that per-barrel crude oil prices averaged $41 in the 2009 first quarter but nearly doubled to $78 in the first three months of this year. "Winter storms further pressured unit costs due to reduced capacity and additional expenses related to extreme weather," the company stated.
22 April 2010
Airline financial losses due to Volcanic ash
News reports state that with air traffic beginning to return to normalcy in Europe, airlines are tallying the bill for the six-day disruption in service caused by volcanic ash, with IATA estimating cumulative lost revenue at $1.7 billion.
Almost all European airspace was available for commercial flights Wednesday, with more than 75% of scheduled flights expected to take place, the first day more than half had operated since April 14 Air France, for example, confirmed it was able to operate a "nearly" normal flight schedule. The one airline still seriously affected was Finnair owing to heavy concentrations of ash in airspace above southern Finland.
IATA said the brunt of the revenue hit was borne by Europe's carriers. British Airways estimated that lost passenger and cargo revenue combined with costs incurred supporting stranded passengers amounted to £15 million ($23 million)-£20 million per day. Ryanair said it expects it lost €6 million ($8.1 million) per day April 15-22.
At the peak of cancellations over the weekend and Monday, airlines were losing $400 million in revenue daily, IATA said. DG and CEO Giovanni Bisignani said the airspace closures "impacted 29% of global aviation and affected 1.2 million passengers a day. The scale of the crisis eclipsed 9/11 when US airspace was closed for three days."
22 April 2010
Winter storms drive AirTran to $12 million first-quarter loss
After leading US majors with a $134.7 million 2009 profit, AirTran Airways slipped to a $12 million net loss in the first quarter owing to higher fuel costs and severe winter weather that disrupted operations during the period.
21 April 2010
American Airlines net loss of $505 Million
News reports state that AMR Corporation, the parent company of American Airlines, Inc., reported a net loss of $505 million for the first quarter of 2010, or $1.52 per share. The results include the impact of a $53 million, or $.16 per share, special item related to the devaluation of the Venezuelan currency in January. Excluding that special item, AMR lost $452 million, or $1.36 per share, in the first quarter.
This compares to a net loss of $375 million, or $1.35 per share, in the first quarter of 2009. The first quarter 2009 results included a $13 million charge, or $0.05 per share, related to A300 aircraft retirements during that quarter. Excluding that special item, AMR lost $362 million, or $1.30 per share, in the first quarter of 2009.
21 April 2010
Delta posts $256 million first-quarter loss
News reports state that Delta Air Lines reported a first-quarter net loss of $256 million, narrowed from a $794 million deficit in the year-ago period, and CEO Richard Anderson said continuing evidence of "the right trends in the revenue environment" have the company "optimistic about the rest of the year" and anticipating a "solidly profitable" second quarter.
"We continue to see solid advance bookings. . .across all geographic regions," President Ed Bastian told reporters and analysts yesterday. "Clearly the improved strength we're seeing comes from improved corporate travel. We're seeing corporate travel improve across all geographic regions, certainly in New York and across the Atlantic. . .We're not quite at 2008 levels [of business passengers]. We're close to 2007 levels and we expect to be up to 2008" later this year.
1 April 2010
Skyservice airline shuts down
News reports state that Skyservice charter airline filed for receivership and shut down its operations on Wednesday 31 March 2010, putting 860 employees out of work.
Citing debt levels and changes in the Canadian holiday travel market, the bankrupt company cancelled flights out of Toronto's Pearson airport, "as well as all remaining flights scheduled to depart Canada during the balance of the season in April," the company said in a release.
The company operated on behalf of other tour operators from numerous Canadian airports to destinations across the Caribbean.
31 March 2010
Aer Lingus fortunes continue to decline
News reports state that Aer Lingus released its full 2009 financial results yesterday, three weeks after a preliminary announcement, and reported a €130.1 million ($175.2 million) loss that represented an 18.4% deterioration from the €109.9 million deficit suffered in 2008
30 March 2010
Jazeera Airways $28.2 Million loss
News reports state that Jazeera Airways reported a net loss of KWD8.2 million ($28.2 million) in 2009, reversed from a KWD4.5 million surplus in 2008, as it navigated what Chairman Marwan Boodai called "a year of contradictions." Revenue slipped 5.5% to KWD46 million. Boodai said the LCC "chose to stay the course" last year as it negotiated the economic downturn and increasing capacity in the region by focusing on boosting its market share. He claimed that by the third quarter it was the largest operator in Kuwait. It carried more than 1.8 million passengers in 2009 and plans to launch service to Lahore, Mumbai, Delhi, Antalya, Hurghada and Salalah this year. It currently operates to 23 destinations in 12 countries with six A320s.
30 March 2010
El Al posts $76 million 2009 loss
News reports state that El Al reported a $76.3 million net loss for 2009, widened from a $41.9 million net loss in 2008, and new President and CEO Elyezer Shkedy vowed to "ensure" this year is "a turning point" by focusing on cutting costs and developing new revenue sources.
VP-Finance Nissim Malki blamed "many factors" for the company's lackluster performance last year, including "the influence of the war in the southern border" in December 2008/January 2009, the global financial crisis and "a severe slowdown in cargo markets."
29 March 2010
Alitalia loses €326 million in first year as private carrier
News reports state that noting that 2009 was marked by the "extraordinary circumstances" surrounding its re-launch as a private carrier, the integration with Air One and a "thorough reorganization of company procedures, commercial policies, industrial organization and network layout," Alitalia Group closed the year with a net loss of €326 million ($434.3 million) on revenue of €2.92 billion.
29 March 2010
Viva Macau has licence revoked
News reports state that the Macau based low-cost airline, Viva Macau, has been grounded after having its licence revoked by government. The carrier cancelled flights last week citing “fuel payment issues” but then did not assist passengers who had been left stranded, according to a Macau government statement.
Civil Aviation Authority President Chan Weng Hong said the organisation was “greatly concerned with the negative impacts of the Viva Macau incident towards passengers and the community”.
The government will also pursue Viva Macau for repayment of around US$25 million in loans made to the carrier in 2008 and 2009.
25 March 2010
Highland Airways placed in administration
News reports state that Highland Airways called in PricewaterhouseCoopers on Wednesday night to take over the running of the business, which also operates in Wales. Most of the company's 100 staff will lose their jobs.
The Inverness-based airline's problems came to light at the start of the year after severe weather led to cancelled flights and worsening debts.
The Civil Aviation Authority (CAA) said operations had been suspended "with immediate effect".
14 March 2010
Varsity Express: Baby Branson’s bogus business
News reports state that A YOUNG aviation entrepreneur, who styled himself “Baby Branson” when he set up an airline at 19, has admitted his latest venture, which collapsed last week, was based on false claims and little more than thin air.
On March 1, Martin Halstead, 23, launched Varsity Express, an airline operating daily return flights between Oxford and Edinburgh. When it came to grief after just a few days, there was widespread sympathy for a plucky young man.
11 March 2010
Air India parent expected loss
News reports state that Air India parent National Aviation Co. of India is expected to lose approximately INR54 billion ($1.18 billion) in its fiscal year ending March 31, similar to the INR55.48 billion deficit suffered in 2008-09, with losses "likely to continue for [a] few more years," Civil Aviation Minister Praful Patel told parliament. The carrier's restructuring plan, a condition of its government bailout, "envisages benefits" of INR19.11 billion in 2009-10, although NACIL has implemented just INR7.53 billion. The company's outstanding fuel bill has reached INR17.41 billion, a debt that the government insists should be resolved "expeditiously." Patel said, "Additional measures to enhance revenues are part of the turnaround plan. These will include measures to enhance yields and improve load factors that have remain[ed] depressed in the recent years. Additional measures to cut costs including wage rationalization and other expenses are also part of the turnaround process."
10 March 2010
Additional layoffs ahead as Aer Lingus plunges to loss
News reports state that Aer Lingus Group reported a loss before taxes and exceptional items of €66.2 million ($90.4 million) in 2009, reversed from an €18.8 million profit in 2008, and a quadrupling of its operating loss to €81 million from €20 million.
3 March 2010
Lufthansa suffers first net loss six years
News reports state that Lufthansa yesterday said it ended a "difficult" 2009 with a net loss of €112 million ($151.9 million), reversed from a restated 2008 profit of €542 million and the company's first full-year deficit since 2003.
Revenue fell approximately 10% to €22.3 billion, while operating profit plunged 90% to €130 million from €1.3 billion in 2008.
The net result implies an €80 million fourth-quarter net loss based on the €32 million deficit incurred through the first nine months of 2009. LH said when announcing its third-quarter results in late October that a full-year operating surplus might be out of its reach. It was €226 million in the black on an operating level through Sept. 30, meaning it suffered an operating loss of €96 million in the fourth quarter.
2 March 2010
Hungarian government reclaims struggling Malev
News reports state that The Hungarian government reacquired control of its flag carrier, Malev Hungarian Airlines, spending HUF25.2 billion ($126.7 million) on a 95% stake that will see the airline return to state control after three years as a privately held company.
The money-losing airline turned to the government for support last autumn in the face of losses that reached HUF10 billion in 2008. The Vnesheconombank-backed AirBridge consortium had taken control of Malev in February 2007 and will continue to hold 5% of the carrier.
1 March 2010
Cyprus airways reverses profit
News reports state that Cyprus Airways lost €3.3 million ($4.4 million) in 2009, reversed from a €1.7 million profit in 2008, as traffic and yield fell sharply. The carrier attributed the result to the "world economic crisis that adversely affects the airline industry." Revenue dropped 20.1% to €249 million and the operating loss of €5.7 million compared to a €2 million surplus the prior year. CY said it has sufficient liquidity to meet its obligations. It sold three older A320s last year and hopes to find buyers for its remaining four owned A320s. It plans to take delivery of four newer leased A320s this year and two in 2011.
1 March 2010
JAL reports record $2 billion nine-month loss
News reports state that Japan Airlines posted a net loss of ¥177.9 billion ($1.99 billion) for the first three quarters of its fiscal year ended Dec. 31, 2009, considerably widened from a ¥1.9 billion loss for the prior-year period.
The result represented a record nine-month deficit for the bankrupt carrier, which said Friday it is establishing an independent investigative committee to "examine past business practices." It said in a statement that it "recognizes and is deeply apologetic for the current situation that has caused great inconvenience and concern to our shareholders, financial creditors, customers, suppliers and other related parties."
26 February 2010
Iberia's profit streak ends with €273 million loss
News reports state that Iberia Group ended what may be its final year as an independent carrier on a sour note, reporting a consolidated net loss of €273 million ($369.8 million) for 2009, reversed from a €32 million surplus the prior year.
The deficit also ended a 13-year annual profit streak for the Spanish airline that is merging with British Airways. Operating revenue plunged 19.2% to €4.46 billion and operating expenses declined 10.9% to €4.93 billion. IB's operating loss widened sharply from a €79 million deficit in 2008 to €464 million last year.
23 February 2010
China Southern receives another CNY1.5 billion from Beijing
News reports state that China Southern Airlines received a CNY1.5 billion ($219.6 million) capital injection from the Chinese government that is expected to reduce the carrier's debt ratio, which stood at around 80% last Sept. 30.
The Guangzhou-based airline will suspend trading today as it develops a plan to issue additional shares to absorb the new capital. Beijing reportedly has CNY15 billion to distribute to the "big three" state-owned carriers. In 2008-09. China Eastern Airlines and CZ received CNY9 billion and CNY3 billion in government cash respectively. Air China last month announced a CNY1.5 billion injection to pay back loans used to finalize last year's acquisition of its Air China Cargo subsidiary
18 February 2010
Qantas profits plunge 72%
News reports state that Qantas is to eliminate most first class service as half-year profit plunges. Qantas yesterday reported a A$58 million ($52.2 million) profit for the half-year ended Dec. 31, down 72% from the A$210 million earned in the year-ago semester, and announced the elimination of first class service to all but two destinations in an effort to lift yield.
The group result would have been a loss but for the contribution of low-cost subsidiary Jetstar Airways, which trebled its earnings, and the frequent-flyer program that doubled earnings. Consolidated revenue slumped 14% to A$6.09 billion while costs declined 15% to A$6.76 billion. Operating profit sank 48% to A$143 million from A$274 million in the first half of fiscal 2008-09.
The Qantas mainline unit posted EBIT of A$60 million, down 63.33% year-over-year, while Jetstar recorded a thumping 181% lift in EBIT to A$121 million. The loyalty program reported EBIT of A$157 million.
12 February 2010
Blue Wings announces its insolvent
News reports state that Blue Wings announced that it was insolvent yesterday, a month after suspending service. The Dusseldorf-based carrier said that "insolvency has become unavoidable since our principal Russian investor [48% shareholder Alexander Lebedev] has not kept his financial promises over the past several months." There is no indication that the carrier may resume flights, and no information was available regarding CEO Jorn Hellwig's effort to purchase Lebedev's stake. Hellwig owns 26% of Blue Wings
** Under the terms of conditions of IPP's Insurance cover was withdrawn for this airline of policies and tickets purhcased on 13th January when the airline ceased operations.
11 February 2010
Air France KLM reports reduced but heavy third-quarter loss
News reports state that Air France KLM Group reported a net loss of €295 million ($404.6 million) for its fiscal third quarter ended Dec. 31, 2009, a 41.9% improvement compared to a loss of €508 million in the year-ago period when results were impacted severely by fuel hedge losses.
11 February 2010
Air Canada posts C$24 million 2009 loss, focuses on cost-cutting
News reports state that Air Canada reported a 2009 net loss of C$24 million ($22.4 million), significantly improved over a net loss of C$1.03 billion in 2008, as it was helped by C$657 million in gains on foreign exchange that were reversed from C$655 million in losses in the prior year.
President and CEO Calin Rovinescu said the carrier "overcame tremendous challenges" last year and has started 2010 in a far "more stable financial position"
10 February 2010
SAS loses $400 million in 2009, extends cost cuts
News reports state that SAS Group lost SEK2.95 billion ($400 million) in 2009, improved 53.7% from the SEK6.36 billion deficit suffered the year before, but the company felt additional cost cuts were necessary and extended its Core SAS reduction program by SEK2 billion to SEK7.3 billion.
8 February 2010
Finnair annual loss doubles to €102 million
News reports state that Finnair reported a 2009 net loss of €102 million ($142.2 million), more than double the €46.3 million loss it suffered in 2008, citing a "historically difficult year" in which demand and yield plunged.
President and CEO Mika Vehvilainen, who took over the carrier's helm on Feb. 1 (ATWOnline, Nov. 12, 2009), said last year "was made particularly difficult by a sharp fall in domestic demand as well as price competition due to overcapacity in the sector on many of our main routes. . .Costs could not be cut as quickly as revenue declined." He said international business and cargo traffic are showing signs of recovery, "but this is still subject to strong price pressure."
He warned that the early part of this year continues to be "difficult," noting that "domestic demand shows no signs of recovery." In addition to continuing to cut costs (the carrier initiated a program in 2008 to slash €200 million in annual costs, of which €150 million has been realized), it "must . . . make every effort to increase growth in demand, create new sources of revenue and improve average prices," Vehvilainen said.
5 February 2010
BA makes record losses
News reports state that British Airways posted its worst ever financial performance and scrapped its dividend today as high fuel prices and a collapse in business travel forced the airline into a loss of £401m.
BA swung from a record profit last year to its biggest deficit since privatisation in 1987 after it was hit by a near-£3bn fuel bill, the weak pound and the sudden deterioration in its most important market, transatlantic business customers, due to the banking crisis.
In a grimly pessimistic set of annual results, Heathrow airport's largest airline declined to offer investors new guidance for this year because of the dire state of the airline market.
Willie Walsh, BA's chief executive, confirmed that no upturn was in sight. "I don't think the economic environment will improve. We don't see any signs of recovery, nothing, right across the globe in all the markets we operate in," he told Guardian.co.uk.
Shares in the flag carrier fell 6.6% to 152p in early trading as Walsh added that, despite signs of the downturn bottoming out in the US, he saw "no green shoots".
1 February 2010
ANA remains in red with $108.7 million third-quarter loss
News reporst state that ANA suffered a ¥9.8 billion ($108.7 million) loss in its fiscal third quarter ended Dec. 31, a 22.2% improvement from the ¥12.6 billion lost in the year-ago period, and maintained its full-fiscal-year forecast of a ¥28 billion deficit.
"The business downturn. . .has been continuing, and passenger demand is taking longer than expected to cover," the company said, adding that economic stimulus measures at home and abroad "have had some effect" and that exports, production and consumer spending are "picking up," especially in Asia. However, it admitted that cost-cutting measures were insufficient "to offset the slump in demand and fall in unit prices".
28 January 2010
Air India reports slightly narrowed third-quarter loss
News reports state that Air India announced a loss of INR14.74 billion ($316.8 million) in its fiscal third quarter ended Dec. 31, 2009, a 9.7% improvement from the INR16.32 billion deficit reported in the year-ago period.
28 January 2010
United narrows 2009 loss
News reports state that United Airlines parent UAL Corp. posted a 2009 net loss of $651 million, narrowed 87.9% from a $5.4 billion loss in 2008, and said it and the airline industry must continue to pare down costs.
28 January 2010
Delta Loss
News reports state that Delta’s year-end net profit of USD291 million it turned into a net loss of USD1.1 billion, despite a USD6 billion decline in revenue year on year. The special items totaled
USD169 million, with USD1.4 billion in fuel hedge losses. The company ended the year with USD5.4 billion in unrestricted
liquidity, a USD400 million increase year-on-year.
It was only special items that kept Delta from USD291 million profit to a net loss of USD1.1 billion.
For the fourth quarter, Delta posted net losses of USD225 million or USD0.27 per share, a USD285 million improvement over the year-ago
quarter, ex special items. With special items, the net loss for the quarter was USD25 million. The carrier's 4Q2009 operating loss was USD46
million.
28 January 2010
IATA confirms 2009 as worst year in aviation history
News reports state that IATA is describing 2009 as “the worst year the industry has ever seen”. Director Gen
industry “permanently” lost 2.5 years of growth in passenger markets and 3.5 years
"permanent" loss of traffic is a big statement, reflecting structural shifts that are occ
markets may never be the same again.
25 January 2010
Kingfisher continues to bleed, loses $91 million in third quarter
News reports state that Kingfisher Airlines reported a INR4.2 billion ($90.9 million) loss in its third fiscal quarter ended Dec. 31, widened 1.7% from INR4.13 billion in the year-ago period, with about half of the deficit resulting from one-time exceptional items and foreign exchange losses.
25 January 2010
Kingfisher continues to bleed, loses $91 million in third quarter
News reports state that Kingfisher Airlines reported a INR4.2 billion ($90.9 million) loss in its third fiscal quarter ended Dec. 31, widened 1.7% from INR4.13 billion in the year-ago period, with about half of the deficit resulting from one-time exceptional items and foreign exchange losses.
Third-quarter revenue fell 5% to INR13.7 billion and operating expenses were cut 17% to INR14.48 billion. Employee and fuel costs decreased 22% and 20% respectively, but INR2.18 billion in exceptional items (compared to INR470 million the year before) erased the effect of the cost cuts.
The Bangalore-based airline said passenger numbers rose 4.2% to 2.7 million. Traffic climbed 14.8% to 2.66 billion RPKs against a 7.5% cut in capacity to 3.57 billion ASKs, fueling a 14.5-point surge in load factor to 74.6%. Yield plunged 18.7%, however, to INR5.08. Unit cost was lowered 10.4% to INR4.06. Kingfisher ended the quarter with 68 aircraft in operation compared to 83 on Dec. 31, 2008.
21 January 2010
Air Jamaica to close by June
News reports state that the Jamaican government has committed to wrapping up the operations of Air Jamaica by June, if a deal with Trinidad and Tobago to take on the loss making airline falls through.
The administration revealed its intention to initiate liquidation of the airline by June in the Letter of Intent sent off to the International Monetary Fund last week.
Talks are ongoing with the Trinidad state-owned Caribbean Airlines to take Air Jamaica off government books.
A deal was expected to be signed over the past weekend to that end, but it never materialised.
21 January 2010
American reports $1.47 billion 2009 loss
News reports state that American Airlines parent AMR Corp. kicked of the US airline industry's full-year reporting season yesterday by announcing a $1.47 billion net loss for 2009
19 January 2010
Japan Airlines files for bankruptcy administration
News reports state that Japan Airlines Corp said on Tuesday it had filed for bankruptcy administration with 2.3 trillion yen ($25.4 billion) in debt as of the end of September, as it seeks to revive itself under a state-backed restructuring plan.
The Enterprise Turnaround Initiative Corp of Japan (ETIC), a fund that can draw on government-backed funding to bail out ailing firms, has said it will support the carrier.
14 January 2010
Grounded German carrier Blue Wings seeks investor
News reprts state that Germany's Blue Wings is looking for funds following a dispute with shareholder Alexander Lebedev, as financial problems led regulators to ban the Duesseldorf-based airline from flying.
The carrier halted flights earlier on Wednesday, mere hours before German aviation authorities revoked its operating license for the time being, according to a spokesman for the company.
12 January 2010
JAL bankruptcy filing nearer
News reports state that Japan Airlines is expected to announce within days that it will file for bankruptcy later this month as part of a turnaround plan that will include eliminating 15,600 jobs, according to news reports from Tokyo.
Kyodo News stated that the Enterprise Turnaround Initiative Corp. of Japan, which will oversee JAL's restructuring, is detailing a recovery path that will enable the carrier to keep operating during bankruptcy but force it to make significant cuts in jobs, pension benefits and wages and to sell assets such as JAL Hotels
11 January 2010
Mesa Air Group Files For Bankruptcy Protection Under Chapter 11
Independent regional air carrier Mesa Air Group, Inc. voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Tuesday 05 January 2010. The company blamed continued lease obligations on aircraft in excess to current requirements.
The company said during the restructuring it will continue to operate as normal, without interruption.
23 December 2009
Spanish Air Comet collapses as administrators impound planes
News reports state that Spanish low cost carrier Air Comet has gone bust, cancelling all services and leaving thousands of passengers stranded after all of the airline’s aircraft were impounded by creditors on Tuesday.
Air Comet largely operates services out of Madrid to destinations in Latin America including daily services to Argentina Ecuador and Peru, and with its collapse left thousands stranded days before Christmas.
16 December 2009
Scotland's biggest airline, Edinburgh-based Flyglobespan, has been placed in administration
News reports state that Scotland's biggest airline, Edinburgh-based Flyglobespan, has been placed in administration this evening.
Last year the airline, which employs 600 staff, carried more than 1.5m passengers and operated 12,000 flights.
A statement is expected soon from PricewaterhouseCoopers, (PWC) which has been appointed as administrator.
The move followed attempts to conclude a financing deal for the airline with Jersey-based Halcyon Investments which broke down today.
Many of those flying with the airline booked online or direct with the company and not through a registered travel agent, leaving them potentially out-of-pocket.
Flights booked this way will not be reimbursed, though those who booked with a credit card or had arranged their own insurance may be covered.
Ryanair has said it will launch a Flyglobespan "rescue fare" to and from Edinburgh and Prestwick airports for any passengers affected.
The Ryanair offer applies to flights into and out of Prestwick to Alicante, Faro, Gran Canaria, Lanzarote, Malaga, Palma and Tenerife, and into and out of Edinburgh to Alicante, Gran Canaria, Lanzarote, Malaga and Tenerife.
11 December 2009
Serbia's Jat Aiways seen facing reform or demise
News reports state that Serbia's state airline Jat Airways is seen having to become more competitive or fade away after the European Union relaxed travel between Belgrade and the bloc, prompting rivals to step up penetration of its home market.
After years of bolstering by the government and protection against outside competitors, the stakes have increased dramatically for Jat following the EU's decision allowing Serbs, FYR Macedonians and Montenegrins to travel visa-free to the EU.
8 December 2009
Jat Airways expects to lose €15 million this year
News reports state that Jat Airways expects to lose €15 million ($22.3 million) this year, lower than the €20- €25 million anticipated previously, but will need €20-€32 million in loans to maintain operations, CEO Srdjan Radovanovic told the Associated Press. He also said that Turkish Airlines has shown "the most serious" interest in investing in the carrier.
30 November 2009
WizzAir suffers €9.5 million in losses
News reports states that the low-cost Budapest-based airline company WizzAir recorded group-level losses of €9.5 million in the business year ended in March 2009, while the company has so far said it is profitable, the business daily Napi Gazdaság reported on Friday, quoting the on-line issue of the Czech newspaper Mlada Fronta Dnes.
26 November 2009
Malaysia Airlines returns to red with a $88.2 million loss
News reports state thate Malaysia Airlines returned to the red in the third quarter, reporting a MYR298.9 million ($88.2 million) loss that represented a reversal from the restated MYR38.6 million surplus earned in the year-ago period and its second deficit in three quarters this year.
A precipitous 26.8% year-over-year plunge in operating revenue to MYR2.89 billion, plus a MYR202.1 million loss on fuel hedges, proved too much for MAS to overcome. Nevertheless, MD and CEO Azmil Zahruddin said that "fuel prices are on an upward trend [and] hedging is the right policy as fuel prices remain volatile."
20 November 2009
Asia/Pacific airlines expect $4.8 billion 2009 loss
News reports state that the Assn. of Asia Pacific Airlines' Assembly of Presidents started on a sober note yesterday with DG Andrew Herdman telling media that the group of 17 Asia/Pacific carriers is expected to lose $4.8 billion this year owing mainly to the global economic downturn.
"The loss will top the $4.3 billion suffered in 2008," Herdman said, adding that airlines remain uncertain of whether signs of a "fragile recovery in passenger and cargo volumes will prove to be sustainable." For the year to Oct. 31, AAPA member carriers' international passenger numbers were down 8.2% year-over-year while cargo traffic slumped 16.5%, particularly troubling in a region where many airlines generate 30% or more of their revenue from airfreight.
17 November 2009
Thai Airways - THB4.03 billion ($119.5 million) loss
News reports state that Thai Airways reported a THB4.03 billion ($119.5 million) loss in the third quarter, reversed from a THB426.2 million profit in the year-ago period that was the product of a large foreign exchange gain. Revenue dropped 27.7% year-over-year to THB39.15 billion while expenses including finance costs and excluding foreign exchange losses fell 31.2% to THB40.27 billion owing largely to a 50.1% fall in average fuel price and capacity cuts. TG President Piyasvasti Amranand said that as a result of the downturn, the airline "adjusted its capacity to better reflect demand. . .and implemented aggressive marketing strategies." Yield excluding fuel surcharges fell 17.1% to THB2.34 and load factor rose 0.7% to 73.9%. Nine-month loss totaled THB1.57 billion as a result of the third-quarter deficit but still a significant improvement from the THB6.61 billion suffered in the first nine months of 2008.
16 November 2009
Iberia swings to $24.5 million loss
News reports statet that in an announcement that highlighted the reasons it agreed to merge with British Airways, Iberia Friday reported a €16.4 million ($24.5 million) third-quarter loss that represented a reversal from the €304 million profit earned in the year-ago period.
Operating revenue plunged 19.6% year-over-year to €1.17 billion "in keeping with the trend throughout the year, as passenger traffic continued to decline, particularly in the business segment," IB said (ATWOnline, Oct. 26). Costs were cut 14.9% to €1.22 billion and the company swung to a €56 million operating loss from a €21.3 million surplus in the 2008 third quarter. It credited capacity and staff cuts for its improvement from the first and second quarters of 2009.
Traffic fell 6% to 13.37 billion RPKs against a 4.8% cut in capacity to 16.28 billion ASKs, lowering load factor 1.1 points to 82.1%. Yield dropped 13.8% to 6.41 euro cents and operating RASK was down 15.5% to 7.17 euro cents. Unit cost fell 10.6% to 7.5 euro cents, or 0.8% to 5.6 euro cents excluding fuel.
IB ended the quarter with 114 aircraft compared to 125 the prior year. Its nine-month loss of €181.9 million compared to a €51.1 million profit after the first three quarters of 2008. It said its financial position was "sound" as its net debt position remained negative. IB and British Airways announced a merger agreement last Thursday.
16 November 2009
JAL posts big quarterly loss, seeks third-party mediation with creditors
News reports state that troubled Japan Airlines Friday reported a net loss of ¥32.1 billion ($357 million) for its fiscal second quarter ended Sept. 30, reversed from a ¥40.1 billion profit in the year-ago period, and announced it has applied for "certified alternative dispute resolution," an out-of-court mediation process that enables strapped Japanese companies to negotiate debt settlements with creditors.
The quarterly loss brought JAL's fiscal first-half deficit to ¥131.2 billion, reversed from a ¥36.6 billion profit in the year-ago period and its worst first-half performance since the 2002 JAL/Japan Air System merger. CFO Yoshimasa Kanayama conceded to reporters in Tokyo that the result, driven by the global economic downturn, was "extremely bad."
While Japanese government officials had indicated last week that elements of a restructuring plan could be unveiled prior to the results release, JAL said Friday that "agreement regarding the proposed business revitalization plan has not yet been reached between the parties concerned." Its turnaround is expected to be overseen by the Enterprise Turnaround Initiative Corp. of Japan, a newly created quasi-government entity designed to help rescue struggling companies.
But it may take ETIC some time to finalize a restructuring plan, necessitating Friday's application for third-party mediation that could result in immediate debt relief while the turnaround strategy is formulated. In addition, the Development Bank of Japan may extend a bridge loan and the Japanese government is pushing for special legislation that would ease JAL's pension burden. Kanayama said the company will need around ¥125 billion in loans to enable it to get through the second half of its fiscal year ending March 31.
Meanwhile, President Haruka Nishimatsu said JAL would like to decide on an international tie-up by year end. American Airlines and Delta Air Lines have been jockeying to make an investment in the Tokyo-based carrier, with JAL's continued participation in oneworld or a switch to SkyTeam at stake. Nishimatsu told reporters Friday it would "make more sense" to remain a part of oneworld, according to Bloomberg News.
15 November 2009
Flyglobspan last minute cash injection to stave off collapse
News reports state that Flyglobespan, Scotland's biggest airline, is believed to have staved off collapse with a last-ditch cash injection on Friday evening.
Administrators were lined up to handle the airline's collapse but directors at Globespan Group managed to secure new funding at the 11th hour. But it is not known whether the additional cash has secured the long-term future of the airline.
It's believed that the Civil Aviation Authority, the industry regulator, was informed about the possible collapse of "an airline". Contingency plans to repatriate thousands of passengers who would have been left stranded by a collapse are thought to have been drafted.
The troubled group also operates baggage and check-in facilities for rival budget airline FlyBe at Glasgow and Edinburgh airports. And last year the company won contracts from the Ministry of Defence to fly to the Falkland Islands and Qatar from RAF Brize Norton in Oxfordshire.
An industry source said: "This is a difficult time for airlines and the travel world. I don't think that anyone can be considered safe."
12 November 2009
Air India's full-year loss doubles
News reports state that Air India lost INR55.48 billion ($1.19 billion) in the fiscal year ended March 31, more than double the INR22.26 billion deficit suffered in the prior year, the carrier announced yesterday.
Revenue dropped 11.6% to INR134.79 billion owing to "global recession, fall in load factors and passenger yields," AI said. Passenger numbers declined 21.6% to 10.4 million and load factor dropped 4.3 points to 59.5%. The airline is seeking some INR50 billion in cash and loans from the government
6 November 2009
British Airways record £292m loss
News reports state that British Airways has plunged to a record pre-tax loss of £292m over the past six months, traditionally its most profitable trading period, as the airline fights to stave off Christmas strike action that will deepen its financial woes.
British Airways chief executive, Willie Walsh, warned BA's 38,690 staff that the airline's worst first half results since privatisation made further cost reductions "essential".
6 November 2009
ExpressJet Holdings loss of $9 million
News reports state that ExpressJet Airlines parent ExpressJet Holdings reported a third-quarter loss of $9 million, reversed from net income of $4.4 million in the year-ago period, although it narrowed its operating loss considerably. Revenue dropped 31.7% to $179.2 million. The company attributed the fall to "softness in passenger demand," according to President and CEO Jim Ream. Expenses were down 35.7% to $187.3 million and operating loss narrowed to $8.1 million, a 71.9% improvement over the $29 million suffered last year. The swing to a net loss largely was the result of nearly $50 million in special gains reported in the 2008 third quarter.
30 October 2009
Pakistan International Airlines lose PKR5.38 billion ($64.5 million)
News reports state that Pakistan International Airlines lost PKR5.38 billion ($64.5 million) in the third quarter, narrowed from a PKR20.4 billion loss in the year-ago period, according to a stock exchange filing cited by Bloomberg News. Revenue dropped 3.5% to PKR22 billion. PIA said the rupee's improved standing against the US dollar buffeted its bottom line. Nine-month loss of PKR10.8 billion compared to a deficit of PKR38.4 billion last year.
30 October 2009
Finnair loses €20.7 million in third quarter, sees tough times ahead
News reports state that a "steep fall" in fares and weak domestic demand helped sink Finnair to a €20.7 million ($30.6 million) third-quarter loss, widened 16.3% from a €17.8 million deficit in the year-ago period, and left the carrier admitting it "still has a long way to go before its corporate structures and the operating conditions they create are sustainably competitive."
The "poor demand and price levels" in Finland mean Finnair is dependent on its Asian business, which now accounts for more than half its scheduled traffic revenue. "The decline in demand for business travel has stabilized at a lower level, but overcapacity in the sector is continuing to keep ticket prices low, irrespective of the customer segment," it said.
Third-quarter revenue plunged 21.8% to €436.9 million while operating expenses were down 15% to €477.1 million. Operating loss improved slightly to €24.1 million from €25.5 million in the year-ago period. Finnair said the results were "in line with our predictions."
29 October 2009
Kingfisher Airlines suffers a INR4.19 billion ($88.8 million) los
News reports state that Kingfisher Airlines suffered a INR4.19 billion ($88.8 million) loss in the fiscal second quarter ended Sept. 30, a 13.3% improvement from the INR4.83 billion deficit suffered in the year-ago period, according to a filing with the Bombay Stock Exchange cited by numerous press reports from India. Revenue dropped 13.7% to INR11.42 billion
28 October 2009
Jet Airways suffers deeper loss, sees 'revival' on horizon
News reports state that A five-day pilot strike combined with "a lean season and lower yields" dragged India's Jet Airways to a INR4.07 billion ($86.6 million) loss in its fiscal second quarter ended Sept. 30, deepened 5.8% from the INR3.85 billion deficit reported in the year-ago period.
23 October 2009
Delta $161 million loss
News reports state that Delta Air Lines reported a third-quarter net loss of $161 million, widened from a $50 million deficit in the year-ago period, blaming $212 million in special charges and a "significant revenue decline" driven by global economic weakness.
Charges included an $83 million noncash hit associated with the refinancing of subsidiary Northwest Airlines' debt, $78 million in merger-related items and $51 million for employee severance. Absent the charges, DL would have posted net income of $51 million, reversed from a $64 million loss on a similar basis in the 2008 third quarter.
23 October 2009
US Airways improves but remains in the red
News reports state US Airways reported an $80 million loss in the third quarter, narrowed considerably from the year-ago period's $866 million deficit that resulted from heavy fuel hedge losses and other special charges. Excluding special items, US was $110 million in the red, compared to $243 million on a similar basis last year.
23 October 2009
Special charges push Delta to $161 million loss
News reports state that Delta Air Lines reported a third-quarter net loss of $161 million, widened from a $50 million deficit in the year-ago period, blaming $212 million in special charges and a "significant revenue decline" driven by global economic weakness.
22 October 2009
American falls to $359 million third quarter loss
News reports state that American Airlines parent AMR Corp. reported a $359 million loss in the third quarter, reversed from a $31 million surplus in the year-ago period, but claimed recent financing announcements and network adjustments "better position it to address near-term challenges and achieve long-term success."
The loss included some $94 million in one-time charges related to sold and grounded aircraft, while the year-ago result was boosted by a $432 million gain from the sale of American Beacon Advisors.
Key to the third-quarter 2009 deficit was a 20.2% year-over-year plunge in revenue to $5.13 billion that was "largely driven by reduced capacity and the reduced demand for air travel and cargo resulting from the global economic downturn," AMR said. Expenses were cut 19.8% to $5.32 billion, thanks in part to a 46.6% fall in fuel costs, and operating loss narrowed 10% to $194 million from $216 million in the year-ago period.
9 October 2009
Kingfisher yet to settle fuel dues with BPCL
News reports state that The state-owned Bharat Petroleum Corporation (BPCL) and the Vijay Mallya-controlled Kingfisher Airlines have not been able to reach common
ground on the settling of dues that Kingfisher owes to the oil marketing company.
Kingfisher counsel Navroz Seervai disputing the claim of insolvency, argued that the airline was paying about Rs 130 crore to another petroleum major for the monthly supplies. He also said the airline could not pay anything more than Rs 10 crore a month, bringing to the court’s notice that in view of the economic downturn, all major airlines were going through a bad patch
2 October 2009
Frontier Airlines emerges from Chapter 11, cover re-instated
News reports state that Frontier Airlines has emerged from Chapter 11. Cover is therefore re-instated under IPP's cover for policies / tickets issued with immediate effect.
1 October 2009
JAT's debt to maintenance company $1.5 million
News reports state that - Serbian flag carrier JAT grounded its fleet on Wednesday after staff from maintenance company JAT Tehnika refused to work on its aircraft because of the airline's overdue debts, a spokeswoman said.
30 September 2009
Cover re-instated for JAL
Further to withdrawl of cover for JAL on 24th September, cover has now been re-instated with immediate effect
28 September 2009
Japan minister says JAL won't be liquidated
News reports state that Japan's transport minister said Sunday he will not force the struggling Japan Airlines, Asia's biggest airline, into bankruptcy.
"We will not crush and liquidate (the airline)," Land, Infrastructure and Transport Minister Seiji Maehara said on a TV Asahi talk show. "It's just impossible."
A team of government-appointed corporate turnaround experts was set up Friday to create a restructuring plan for the airline, whose own draft reconstruction plan Maehara called "insufficient."
The team will make a recommendation to the transport minister by late October or early November.
Officials from the airline and the transport ministry were not available for comment Sunday.
The airline incurred its biggest-ever quarterly net loss of 99 billion yen ($1 billion) in the three months to June, and has forecast a net loss of 63 billion yen ($701 million) for the current fiscal year to March 2010. JAL was privatized in 1987.
JAL has sought public funds for survival. Its request for taxpayer money came months after it received 60 billion yen ($668 million) in loans from the government-owned Development Bank of Japan in June.
In his meeting Thursday with the transport minister, JAL President Haruka Nishimatsu revealed that the airline is short 450 billion yen ($5 billion) through March 2011, money that is needed for debt repayment, according to media reports. Nishimatsu reportedly told Maehara that JAL was planning to cover part of the payment by selling off its in-flight meal catering unit and reviewing company pension plans.
JAL's original restructuring scheme also included 6,800 job cuts, or around 14 percent of its workers.
The airline has reportedly been in talks on financial tie-ups with several top airlines including Delta Air Lines Inc., the world's biggest airline operator, its rival American Airlines Inc. and Air France-KLM, Europe's biggest airline group.
26 September 2009
* JAL on the brink of collapse
News reports state that Japan Airlines is teetering on the brink of collapse as the government refused calls to save it from a $15 billion debt pile yesterday (September 24).
A Japanese government task force has now been formed which may split the carrier into “good” and “bad” parts. It will report back at the end of November.
The request for the bail out was made by JAL president Haruka Nishimatsu at a meeting with Japan’s new transport minister, Seiji Maehara, as reported yesterday.
* ** Under the terms and conditions of IPP's policies cover is exlcuded with immediate effect for tickets and policies issued on or after 24th September 2009
25 September 2009
Troubled JAL seeks government bailout
News reports state that Japan Airlines President Haruka Nishimatsu yesterday asked Seiji Maehara, Japan's new transport minister, for a government bailout, conceding that even a cash infusion from a foreign investor likely won't be enough to keep the troubled carrier afloat.
16 September 2009
Current crisis 'worse than 9/11' as IATA boosts loss forecast to $11 billion
News reports state that Declaring that the situation facing the world's airlines "has never been more difficult," IATA DG and CEO Giovanni Bisignani said yesterday in Washington that the airline industry now is expected to lose $11 billion this year, a deterioration from the association's forecast of a $9 billion loss issued at its AGM in early June.
Key factors driving the downward revision are rising fuel prices and "exceptionally weak yields," which will cause revenues to decline by 15% or $80 billion this year to $455 billion.
2 September 2009
IATA: Second-quarter losses plunge past $2 billion
News reports state that IATA said 54 airlines that have reported second-quarter financial results have lost a combined $2.02 billion, a figure signifying a "further deterioration" the organization said is troubling considering that carriers "usually make 50% of their profits in this seasonally strong quarter."
The reporting carriers lost $926 million in the year-ago period and approximately $4 billion in the 2009 first quarter, IATA said in an Airlines Financial Monitor released yesterday. The industry's second-quarter operating loss of $468 million compared to a $2.3 billion profit in the 2008 second quarter.
Twenty North American airlines lost a combed $134 million last quarter, narrowed 68% from $419 million in the year-ago period. Twelve European carriers suffered a $1.1 billion loss, reversed from a $439 million profit, while 16 Asia/Pacific airlines lost $1.29 billion, widened 34.7% year-over-year.
1 September 2009
SkyEurope suspends all flights
News reports state that Slovakia-based no-frills airline SkyEurope has suspended all its operations because of what it described as a “lack of suffucient interim funding”.The airline has been in bankruptcy protection since June but said it had found investors to secure its future.However, it suspended all flights earlier today, and trading in its shares was suspended on the Vienna stock market.
SkyEurope flew mainly in eastern Europe but operated five routes from Luton, including Vienna and Prague.
1 September 2009
Virgin Blue plunges to A$160 million full-year loss
News reports state that Virgin Blue Holdings blamed the tough operating environment, one-off charges and nonrecurring costs for a A$160 million ($133.2 million) loss in the fiscal year ended June 30, the company's worst-ever result and a reversal from the A$97.7 million surplus reported the prior year.
28 August 2009
Aer Lingus losses widen
News reports state that Losses at Aer Lingus deepened in the first half of the year as fares fell.The operating loss of almost 93 million euros compared to 23.4 million euros lost in the first six months of 2008. Revenue in the half year to the end of June dropped by 12.2% to 555 million euros. A 17% drop in average fares coupled with increased fuel prices contributed to the fall in revenue.
The outlook for the rest of the year 2010 was described as being “extremely challenging” with expectation that recovery in the Irish economy will take until 2011 at the earliest.
28 August 2009
* East Star Airlines goes into bankruptcy
News reports state thate East Star Airlines, a debt-laden privately-owned Chinese airline, officially went bankrupt on Thursday after a long and desperate fight to stay aloft. It was the first of China's airlines to do so.
The Intermediate People's Court in East Star's hometown of Wuhan said a plan submitted by the East Star Group and ChinaEquity was unfeasible and failed to meet the conditions for a legal restructuring, the Xinhua news agency said on Thursday.
27 August 2009
CSA Czech announces cuts, $99.6 million half-year loss
News reports state that CSA Czech Airlines suffered a $99.6 million loss in the first half of 2009 under international accounting standards and confirmed yesterday that it will reduce both its fleet and its workforce as it seeks to return to profit next year.
25 August 2009
Turkish suffers second-quarter loss
News reports state that Turkish Airlines reported a net profit of €48 million ($68.7 million) through the first six months of 2009, down 64% year-over-year, implying a second-quarter loss of approximately €25.6 million.
24 August 2009
CSA posts large losses for first half of 2009
News reports state that Czech state-run airline Èeské aerolinie (ÈSA) posted a loss of Kc1.83bn in the first half of 2009, server iDnes.cz has said, referring to material which the company will make public at a press conference on Wednesday.
The loss is more than CZK 0.5bn higher than the plan of ÈSA's management, the server said.
For the full year, ÈSA expects a loss of around CZK 2bn. Sales dropped by CZK 1.5bn year-on-year to CZK 9.5bn in the first half.
20 August 2009
El Al second-quarter loss widens on plunging revenues
News reports state that El Al Israel Airlines reported a net loss of $19.7 million for the second quarter, widened from a deficit of $12.8 million in the year-ago period, as revenues plunged 28.4% to $399.4 million paced by a 54% decline in cargo revenues. During the second quarter, the company continued to confront the results of the world financial crisis.
18 August 2009
LOT suffers $60.9 million loss first 6 months of 2009
News reports state that LOT Polish Airlines suffered a PLN178 million ($60.9 million) loss in the first six months of 2009, which included the closure of its low-cost subsidiary Centralwings, and will bring in a financial adviser to help sell new shares, Reuters reported. "Options include selling a stake to another carrier, a financial investor or even floating the airline on a stock exchange," CEO Sebastian Mikosz was quoted as saying. "We're in talks with an investment bank which will advise us on the capital hike," targeted for next year.
12 August 2009
Scandinavian airline SAS to cut 1,500 jobs
News reports state that Scandinavian airline SAS will launch an entirely new cost program and lay off 1,500 employees in a move to curb swelling losses.
SAS Group, half-owned by Sweden, Norway and Denmark, said it will cut more jobs, reduce salaries and slash other expenses after reporting its seventh uninterrupted quarterly net loss.
10 August 2009
JAL sinks to $1 billion quarterly loss, announces 'drastic adjustments'
News reports state that Japan Airlines reported a steep ¥99 billion ($1.04 billion) net loss for its fiscal first quarter ended June 30, dramatically widened from a ¥3.4 billion loss in the year-ago period, and announced "drastic adjustments" to its international flight network.
10 August 2009
Finnair CEO announces resignation after fourth straight quarterly loss
News reports state that Finnair President and CEO Jukka Hienonen announced his resignation Friday after the airline posted its fourth consecutive quarterly net loss, a €26.1 million ($37.5 million) second-quarter deficit that reversed net income of €13.4 million in the year-ago period. "I am not satisfied with the results achieved. The rate of change has been insufficient," Hienonen said
6 August 2009
TAP narrows first-half loss
News reports state that TAP Portugal parent TAP Group reported a €72.4 million ($104.3 million) net loss in the first half, a 53.2% improvement on the €154.9 million lost in the year-ago semester.
Operating revenue decreased 11.8% year-over-year to €927 million and costs fell 19.9% to €855.2 million, including a 49.7% reduction of its fuel bill to €157.6 million.
4 August 2009
Ailing Austrian Airlines reports 1H, Q2 losses amid 'extremely weak demand'
News reports state that Austrian Airlines, the ailing carrier due to be taken over by Germany's Lufthansa, reported losses for the second quarter and first half of the year, blaming the slump in demand affecting the global aviation industry.
The airline experienced a loss of euro78.5 million ($113 million) in the April-June period, compared with a profit of euro11.7 million ($16.8 million) a year earlier. "We are suffering from extremely weak demand, similar to the situation affecting the entire airline industry," Peter Malanik and Andreas Bierwirth, members of Austrian's executive board, said in a statement. "The crisis has relentlessly revealed our weaknesses."
31 July 2009
Kingfisher Airlines first quarter loss
News reports state that Kingfisher Airlines reported a INR2.43 billion ($50 million) loss in its fiscal first quarter ended June 30, widened from a INR1.58 billion deficit in the year-ago period, according to Dow Jones. Revenue dropped 6% year-over-year to INR13.14 billion and the board reportedly approved a INR5 billion equity raising through a rights issue, follow-on offer or placement of deposit receipts. EBITDA was positive at INR2.54 billion compared to a INR3.24 billion loss in the quarter ended June 30, 2008. The airline suffered a INR16.09 billion loss in the fiscal year ended March 31.
31 July 2009
Air France KLM falls to €431 million first-quarter loss
News reports state that citing sharp declines in volume and unit revenue for both passenger and cargo transport, Air France KLM yesterday announced a €431 million consolidated net loss in its fiscal first quarter ended June 30, a marked deterioration from the €132 million profit earned in the year-ago period.
Results were reported on a pro forma basis and include the addition of Martinair, which AF KLM now wholly owns, but exclude its 25% stake in Alitalia. Total group revenue fell 20.5% to €5.17 billion, comprising an 18.7% drop in passenger revenue and a 41.5% plunge in cargo. Operating costs declined 10.1% to €5.66 billion.
Operating result was affected by a negative fuel hedging impact of €252 million and swung from a €201 million profit in the year-ago quarter to a €496 million loss. The passenger business suffered a €141 million operating loss excluding the hedging impact while cargo lost €253 million.
31 July 2009
Singapore Airlines suffers first loss in six years
News reports state that the global economic downturn, swine flu and unfavorable fuel hedges were enough to drag Singapore Airlines to its first quarterly deficit since 2003, a S$307.1 million ($212.6 million) loss that compared to a S$358.6 million profit in the fiscal first quarter of 2008-09.
Group revenue during the quarter ended June 30 dropped 30.5% to S$2.87 billion while expenses were reduced 15.8% to S$3.19 billion. A S$287 million loss on fuel hedges partially offset the S$1.14 billion it saved on fuel prices compared to last year. Operating loss of S$319.3 million represented a reversal from the S$343.2 million earned in the year-ago quarter.
28 July 2009
Jet Airways loss
News reports state that Jet Airways suffered a INR2.25 billion ($46.1 million) loss in its first fiscal quarter ended June 30, a reversal from the year-ago period's INR1.43 billion profit, but said that "operationally the performance has stabilized" and that efforts to reduce capacity and costs "have started to show results."
Revenue fell 16.2% to INR24.28 billion as passenger numbers declined 18% to 2.6 million, but it was a one-time charge of INR9.16 billion related to a change in the company's depreciation policy that produced the final result. Jet flew 4.91 billion system RPKs during the quarter, down 10.7%, against an 18% cut in capacity to 6.69 billion ASKs. Load factor rose 6 points to 73.4%.
24 July 2009
Air France KLM reports 20.5% fall in first-quarter revenue
News reports state that Air France KLM Group said revenue in the fiscal first quarter ended June 30 plunged 20.5% year-over-year to €5.19 billion ($7.37 billion), reflecting continuation of the January-March trend and "in line with our expectations."
23 July 2009
Delta posts $257 million loss, promises 'top-to-bottom' review
News reports state that Delta Air Lines posted a second-quarter net loss of $257 million, narrowed from a $1.04 billion deficit in the year-ago period, with results for both quarters heavily affected by special charges.
22 July 2009
Continental reports $213 million loss, announces 1,700 job cuts
News reports state that Continental Airlines reported a second-quarter net loss of $213 million, widened from a $5 million deficit in the year-ago quarter, and announced it will cut 1,700 additional jobs "across the company" to mitigate the impact of "significant declines in high-yield traffic."
17 July 2009
Air India May Get State Bailout on Salary Delay, Cash Crunch
News reports state that Air India, the state-run carrier that has $1.5 billion in accumulated losses, is set to get its first government bailout after a slump in air travel left it unable to pay salaries and buy planes.
16 July 2009
American posts $390 million second-quarter loss as revenue falls 20.9%
News reports state that American Airlines parent AMR Corp. said a "very difficult revenue environment" drove a second-quarter net loss of $390 million, narrowed 73.3% from a $1.45 billion deficit in the year-ago period when heavy noncash impairment charges dragged down the bottom line. But the loss actually was widened from a $298 million deficit last year
7 July 2009
Mexico grounds airline Aviacsa for unpaid debt
News reports state that Mexico has grounded carrier Aviacsa for the third time in a month, saying the airline owes the government 292 million pesos ($22 million) for the use of Mexican airspace. The Transportation and Communications Department says in a statement that the suspension will end when the airline pays up.
6 July 2009
Russian airline KrasAir declared bankrupt
News reports state that An East Siberian court of arbitration upheld on Monday an aircraft leasing company's bankruptcy petition against KrasAir, one of Russia's largest airlines. KrasAir, part of the crisis-hit AirUnion alliance, ceased operations last October over a liquidity crisis
30 June 2009
Airlines lost $3 billion in first quarter
News reporst state that the world's airlines lost more than $3 billion in the first quarter of 2009, the International Air Transport Association (IATA) said on Tuesday, maintaining its estimate for full-year losses of $9 billion.
In its latest snapshot on the industry, the Geneva-based lobby said weak travel demand and lower freight volumes in the global recession had bled revenues for major carriers, in "a significant deterioration from last year."
"This deterioration was before the recent rise in fuel prices," IATA said, warning the 30 percent increase in oil and jet fuel prices since early May would squeeze airline cash flows further in coming months.
Both oil and jet fuel prices have risen almost $20 a barrel in the past two months, and are now 75 percent higher than their low point at the end of 2008, the Financial Monitor report said.
"Airlines have not yet felt the full impact of this oil price rise," it said.
But it said it was not changing its previous 2009 loss forecast of $9 billion, which follows revised 2008 losses of $10.4 billion.
On Tuesday, U.S. crude traded around $72 per barrel.
IATA, which represents more than 200 airlines, also said carriers trying to fly fewer flights to save costs during the downturn have not managed to cut capacity in line with shrinking air transport demand.
26 June 2009
Fitch downgrades DL, warns of possible UA, AA, US bankruptcy filings
News reports state that Delta Air Lines' credit facility rating was downgraded yesterday by Fitch Ratings, citing "the continued erosion of the airline's near-term cash flow generation" and the expectation that it will "report another year of substantially negative free cash flow in 2009 as the airline struggles to adjust capacity to a diminished level of demand."
Its credit rating was lowered to B- from B. In comparison, American Airlines, US Airways and United Airlines all have ratings of CCC. "Any of those carriers" could be forced to file for bankruptcy protection "as early as the winter if operating trends fail to stabilize," Fitch warned.
23 June 2009
Lufthansa's financial outlook deteriorates
News reports state that Lufthansa's forecast of a "distinctly positive" full-year operating profit is in jeopardy, it said Friday, and it now is focused on "avert[ing] an operating loss in the current financial year."
Chairman and CEO Wolfgang Mayrhuber confirmed two weeks ago that the company expected a 10% drop in passengers and a 20% fall in revenue this year. It reported a €256 million first-quarter net loss and a €44 million deficit on the operating level.
22 June 2009
JAL looks set for $1 billion government loan
News reports state that the Japanese government is preparing to extend a loan of approximately ¥100 billion ($1.04 billion) to Japan Airlines, Finance Minister Kaoru Yosano said.
Speaking to reporters yesterday, Yosano said he received a request from Transport Minister Kazuyoshi Kaneko for the loan through the Development Bank of Japan. "We hope to cooperate through DBJ loans" but the aid only will be granted "on the premise that [JAL] must do its best to improve management," he said.
According to the Nikkei, the government is considering guaranteeing some 80% of the loan and three private sector banks are participating.
Last week JAL unveiled a series international schedule cuts as it attempts to halt the bleeding that resulted in a ¥63.1 billion loss in the fiscal year ended March 31
22 June 2009
Slovakia's SkyEurope gets creditor protection
News reports state that struggling Slovak low-cost airline SkyEurope said that it had gone into bankruptcy protection in order to reorganise its affairs in an orderly fashion.
Listed on the Vienna stockmarket, the Slovak carrier said a Bratislava court had offered it protection from creditors while management implemented the restructuring of its business to make it more attractive to potential investors.
17 June 2009
Malaysia Airlines suffers $196.8 million first-quarter loss
News reports state that A "collapse in demand" contributed to a MYR694.8 million ($196.8 million) first-quarter loss for Malaysia Airlines compared to a MYR120.5 million profit in the first three months of 2008.
16 June 2009
Virgin America posts $40.3 million first-quarter loss
News reports state that Virgin America reported a first-quarter net loss of $40.3 million, narrowed from a net deficit of $52 million in the year-ago period, and the nearly two-year-old carrier said it is poised to continue growing steadily.
16 June 2009
Airline stocks falter; Delta, US Airways lead decliners
News reports state that Major U.S. airline stocks fell Monday, led by declines from Delta Air Lines and US Airways.
Airline shares have come under selling pressure over the past week as crude-oil prices rose above $72 a barrel.
11 June 2009
Fitch warns United's structure 'unsustainable' in current economy
News reports state that United Airlines' credit facility rating was downgraded yesterday by Fitch Ratings, which warned that the carrier is facing "full-year passenger RASM declines of more than 10%" and "could report substantially negative free cash flow for the final three quarters of 2009."
The rating agency cautioned that "United's highly leveraged capital structure [is] unsustainable in the absence of a sharp turnaround in industry operating fundamentals." It also questioned UA's ability to finance the large long-haul aircraft order for which it recently issued an RFP
8 June 2009
Aer Lingus facing 'most difficult period' in its history
News reports state that Aer Lingus is "facing the most difficult period in its 73-year history," Chairman Colm Barrington told shareholders at the company's annual general meeting in Dublin Friday, conceding that yields in all its markets continued to decline in April and May.
8 June 2009
Kenya Airways posts unexpected fiscal year loss on hedging charges
News reports state that Kenya Airways posted a KES4 billion ($49.2 million) loss for its fiscal year ended March 31, reversed from a KES3.87 billion profit in the prior year and the first annual deficit it has endured since its privatization in 1996.
It said the loss was driven by fuel hedging losses and depreciation of the Kenyan shilling versus the US dollar.
7 June 2009
IATA says global airlines to lose $9 bln in 2009
News reports statet that the global airline industry is facing an unprecedented crisis and is likely to lose $9 billion this year, nearly double an estimate made just three months ago, the International Air Transport Association said on Monday.
"This is the most difficult situation the industry has faced," Giovanni Bisignani, IATA's director general and CEO, told the aviation body's annual meeting in the Malaysian capital.
"Our industry has been shaken."
IATA had predicted in March that 2009 losses for the airline industry would total $4.7 billion. It has also revised its estimate of 2008 losses to $10.4 billion from $8.5 billion.
Bisignani said the aviation industry's 2009 revenues would fall by $80 billion to $448 billion because of the global economic crisis.
4 June 2009
Asiana suffers heavy full-year, first-quarter losses
News reports state that Asiana Airlines suffered a KRW227.17 billion ($183.5 million) loss in 2008, reversed from a KRW106.26 billion profit the prior year as the value of the won collapsed against the dollar and the Korean economy faltered, and followed that with an even deeper first-quarter loss.
The 2008 loss occurred despite a 16.6% increase in revenue to KRW4.22 trillion. Expenses soared 26.3% to KRW3.7 trillion and Asiana's operating result swung to a KRW52.68 billion loss from a KRW171.61 billion profit in 2007.
28 May 2009
Air Berlin focuses on Europe as first-quarter loss widens
News reports state that Air Berlin lost €88.4 million ($123.4 million) in the first quarter, widened 48.3% from its €59.6 million deficit in the year-ago period, although revenue and yield rose and its impending partnership with TUIfly appears to be on the verge of being finalized.
27 May 2009
Jet's full-year loss deepens
News reports state that Jet Airways finished its fiscal year ended March 31 INR4.02 billion ($84.7 million) in the red compared to a INR2.53 million loss in 2007-08 and said a return to breakeven and profitability "requires exceptional efforts" considering the "sluggish demand" forecast for the coming year.
22 May 2009
Travel plans in disarray as OzJet grounded
News reports state that Passengers at Perth Airport are furious after their travel plans were thrown into disarray today. The effective grounding of OzJet’s operations in Perth over unpaid airport charges has affected thousands of Bali holiday makers. The grounding of the airline, which operates to Derby and twice weekly Bali charters for IndoJet, is due to unpaid airport charges. Perth Airport chief executive Brad Geatches told thewest.com.au that it would not process its passengers because the airport was owed more than $200,000 in back payments.
20 May 2009
Air France KLM suffers first full-year loss
News reports state that despite what it called its responsiveness to unprecedented conditions in the second half of its fiscal year ended March 31, Air France KLM Group incurred its first loss since the 2003 merger, an €814 million ($1.1 billion) deficit that compares to a €756 million profit in 2007-08. Its operating loss amounted to €129 million, reversed from a €1.41 billion operating profit the prior year.
18 May 2009
Air Fiji's shareholders want answers
News reports state that Fiji's domestic aviation operator Air Fiji has ceased operation. And shareholders particularly small shareholders, totalling a little over 40, are demanding that a meeting be held so that management can explain how it has allowed itself to be in such a state. Speaking on the grounds of anonymity, one shareholder alleged that for one and a half years the company has failed to send them financial statements.
15 May 2009
No end in sight for Air Fiji saga
News reports state that the government and the representatives of the Tuvalu government are yet to meet to discuss the future of Air Fiji Limited which has closed all its offices in the country. The Tuvalu government which has 51% shares in Air Fiji has not given any reason for the closure of Air Fiji and has said that its representatives will meet with the Fiji government to discuss the matter.
14 May 2009
China Eastern likely to get another CNY2 billion from Beijing
News reports state that China Eastern Airlines is expected to receive a further CNY2 billion ($294 million) capital injection from the Chinese government to help the struggling carrier survive.
13 May 2009
JAL Group posts big loss in 2009 fiscal year, expects same in 2010
News reports state Japan Airlines blamed the economic downturn for a net loss of ¥63.1 billion ($651.2 million) for the fiscal year ended March 31, an ¥80 billion reversal from a net profit of ¥16.9 billion in the prior year.
12 May 2009
Higher Fuel Costs, Falling Demand Push Iberia Deeper Into the Red
News reports state that MADRID -- Iberia Lineas Aereas de Espana SA said Tuesday its net loss widened in the first quarter, hit by high fuel costs and waning demand for air travel as a recession takes hold in Spain.
The country's largest airline by sales reported a net loss of €92.6 million ($125.8 million), compared with a €400,000 net loss a year earlier. Revenue fell 16% to €1.1 billion.
11 May 2009
Air Canada posts C$400 million loss
News reports state that Air Canada reported a first-quarter net loss of C$400 million ($342 million), widened 38.9% from a C$288 million loss in the year ago period, and new President and CEO Calin Rovinescu said the carrier is urgently seeking relief from its pension funding obligations.
8 May 2009
Korean Air reports $413 million first-quarter loss
News reports state that Korean Air posted a first-quarter net loss of KRW526 billion ($413 million), widened 61% from a net loss of KRW326 billion in the year-ago period, marking its sixth consecutive quarter in the red.
7 May 2009
Rough first quarter leads to 68% profit drop at SkyWest
News report state that Foul weather and maintenance problems contributed to a 68% decline in SkyWest Inc.'s first-quarter profit to $9.4 million from $29.1 million in the year-ago period.
Revenue fell 22.5% to $672.6 million. The company and its SkyWest Airlines and Atlantic Southeast Airlines affiliates provide regional flying for United Airlines, Delta Air Lines and Midwest Airlines with a fleet of 440 aircraft.
6 May 2009
Easyjet losses double
News reports state that Easyjet said it remains confident of a full-year profit despite its half-yearly losses more than doubling. The airline reported a pre-tax loss of £129.8m for the six months to March 31, compared with a £48.4 million loss the year before. Easyjet blamed the increased losses on higher fuel costs and the fact that Easter fell later this year.
6 May 2009
Austrian continues to bleed as it waits for Lufthansa rescue
News reports state that a first quarter that was "difficult in the extreme" ended for Austrian Airlines Group with an €88.1 million ($117.3 million) loss, widened 45.9% from the €60.4 million deficit reported in the year-ago period.
5 May 2009
Royal Jordanian first-quarter loss nearly doubles
News reports state that Royal Jordanian reported a JOD8.5 million ($11.9 million) first-quarter loss, nearly double the JOD4.4 million deficit reported in the year-ago period. Revenue fell 11% year-over-year to JOD124 million. Yield was down 5% and passenger boardings slipped 11.2% to 491,000. Load factor dropped 6 points to 62%. RJ said it expects to "compensate" for the first-quarter result with "growth in bookings on all sectors" during the second and third quarters
30 April 2009
Lufthansa sees heavy first-quarter loss
News reports state that Lufthansa was not immune to the global economic downturn, reporting a first-quarter net loss of €256 million ($333.8 million) that represented a reversal from the €44 million profit reported in the first three months of 2008.
It cited "weak demand" as the principal reason for the result, which also included a €44 million operating loss that compared to a €172 million operating profit in the year-ago period. Revenue fell 10.7% to €5 billion.
29 April 2009
SAS narrows first-quarter loss to $91.4 million
News reports state that SAS Group narrowed its first-quarter loss by nearly 36% to SEK748 million ($91.4 million) from the SEK1.16 billion reported in the year-ago period, although it said that "uncertainty with regard to when recovery will begin is considerable".
29 April 2009
Finnair posts $24.5 million first-quarter loss
News reports state that Finnair reported a first-quarter loss of €18.6 million ($24.5 million), reversed from a €3.1 million profit in the year-ago period, as "the potential for profitability has run into the sand due to feeble demand and a collapse in price levels," President and CEO Jukka Hienonen said.
29 April 2009
JAL nearly doubles full-year loss projection to $651 million
News reports state that Japan Airlines now expects to report a ¥63 billion ($651.3 million) loss in its fiscal year ended March 31, nearly double the ¥34 billion it forecast in February, owing to a "relentless" decline in global demand.
28 April 2009
Aer Lingus sees bigger-than-expected 2009 loss
News reports state that Irish airline Aer Lingus believes the average fare trend for 2009 will be worse than previously expected and now expects a loss materially below the bottom of the range of current market expectations.
27 April 2009
LOT on the edge of bankruptcy
News reports state that Poland’s national carrier, LOT airlines, experienced a 700 million zlotys (155 million euros) loss in 2008. If the carrier does not find investors soon then it could go into bankrupt within weeks. Over 300 million zlotys of the loss resulted from contracts for fuel, made when the price was high last year.
The financial situation is so bad at LOT that an auditor is refusing to sign the annual balance sheet.
24 April 2009
US Airways posts $103 million first-quarter loss
News reports state that US Airways reported a first-quarter net loss of $103 million, narrowed from a net deficit of $237 million in the year-ago period.
23 April 2009
Continental Airlines $136 million first quarter loss
News reports state that Drops in both business travel and economy class yields dragged Continental Airlines to a $136 million first-quarter loss, widened 65.9% from an $82 million deficit in the year-ago period.
22 April 2009
United $382 million first quarter net loss
News reports state that United Airlines parent UAL Corp. reported a first-quarter net loss of $382 million, narrowed from a deficit of $549 million in the year-ago period, but conceded that its net loss for the three months ended March 31 would have been $579 million absent noncash mark-to-market fuel hedge gains and accounting changes.
22 April 2009
Delta posts $794 million first-quarter loss
News reports state that Delta Air Lines yesterday announced the imposition of a $50 fee for a second checked bag on international flights and the grounding of its 14 747-200 freighters, as well as 36 additional aircraft by year end, in response to a $794 million first-quarter loss, narrowed from a $6.39 billion deficit in the year-ago period when heavy goodwill impairment charges dragged on the bottom line.
DL said the 2009 deficit mostly was attributable to $684 million "in realized fuel hedge losses" as the carrier still had 77% of its fuel consumption hedged in the first quarter at well above current prices. "We essentially broke even for the quarter excluding fuel hedges and special items," CEO Richard Anderson said. The company has 75% of its fuel consumption hedged in the current quarter but will wind down to 36% in the fourth quarter.
20 April 2009
Cathy Pacific $1.1 Billion 2008 loss
News reports state that On the heels of a HK$8.56 billion ($1.1 billion) 2008 loss that represented its first full-year deficit in a decade, Cathay Pacific Airways said Friday that it will confront a "toxic combination" of challenges with measures including an 8% capacity cut beginning next month and unpaid leave for employees.
"We anticipate an extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash," CEO Tony Tyler said. "We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business." He said a "marked deterioration" in first-quarter business included a 22.4% year-over-year decline in revenue.
17 April 2009
Royal Jordanian first loss in five years
News reports state that After four consecutive years in the black, Royal Jordanian suffered a JOD23.4 million ($32.8 million) net loss in 2008 as it absorbed JOD46.7 million in fuel hedge losses after reporting a JOD20.4 million profit in 2007.
17 April 2009
Air China loses $1.34 billion in 2008
News reports state that Air China joined its "big three" rivals in suffering a significant 2008 loss, reporting a CNY9.15 billion ($1.34 billion) deficit under Chinese accounting standards that marked a reversal from the CNY3.7 billion profit in the previous year.
17 April 2009
Southwest reports $91 million first-quarter loss
News reports state that Southwest Airlines' stretch of unprofitability continued with a first-quarter net loss of $91 million, reversed from a $34 million profit in the year-ago period and the LCC's third consecutive quarter in the red, leading it to initiate a "systemwide voluntary early-out program" as part of an effort to "align headcount to current capacity."
16 April 2009
China Eastern's 2008 loss exceeds $2 billion
News reports state that China Eastern Airlines reported a CNY13.93 billion ($2.04 billion) loss in 2008, according to domestic accounting standards, a reversal from a CNY604 million profit net profit reported in 2007.
Its loss under international accounting standards reached CNY15.26 billion. Operating revenue fell 4% year-over-year to CNY41.84 billion (domestic accounting standards) while expenses climbed 14% to CNY43.08 billion, an increase attributable mainly to a 22.3% jump in fuel costs to CNY18.49 billion.
16 April 2009
American reports $375 million first-quarter loss
News reports state that American Airlines parent AMR Corp. posted a first-quarter net loss of $375 million, 10.1% worse than the net deficit of $341 million in the year-ago period, citing "declining revenues, fares and traffic."
15 April 2009
Hebridean Island Cruises International Ltd
IMPORTANT MESSAGE for people who have paid for tickets with credit cards or Visa debit cards
As you may be aware, Hebridean International Cruises Ltd (HIC Ltd) went in to administration on 8 April 2009. At present we do not know whether any bookings made with HIC Ltd prior to the administration will be honoured by the company. In the circumstances, we will not be able to answer individual queries until we are updated by the administrators of HIC Ltd.
We appreciate that you will be concerned about your booking. If you have paid for your booking by either credit card or by Visa debit card, you may have a claim for a refund from your card issuer, and we suggest that you contact your card issuer for further information.
We will update this message when we have received information from the administrator.
15 April 2009
China Southern plunges to $704.1 million 2008 loss
News reports state that China Southern Airlines yesterday reported its first full-year loss in three years, a CNY4.82 billion ($704.1 million) deficit that represented a reversal from the CNY1.84 billion profit reported in 2008.
The airline had warned last month that its loss would be deeper than expected, and a 1.6% year-over-year rise in revenue to CNY54.40 billion was not nearly enough to offset high fuel prices, the spring Sichuan earthquake, slowing demand and impairment charges related to retired aircraft. In a filing cited by both Dow Jones and Bloomberg News, CZ reported a 1.8% lift in RPKs to 83.18 billion and a 2.3% increase in passenger numbers to 58.2 million.
9 April 2009
Brussels Airlines €12.2 million loss
News reporst state that Brussels Airlines reported a €12.2 million ($16.3 million) net loss for last year, a reversal from the €23.1 million profit earned in 2007, owing largely to mark-to-market fuel hedging losses.
The carrier said it is being impacted by the recession "just like all other airlines" and that it is taking necessary measures to reduce costs further, safeguard its market position and boost revenue. It expects revenue to drop €150 million this year and is seeking to trim costs by at least €40 million, according to press reports.
7 April 2009
China Airlines $968.9 million 2008 loss
News reports state that China Airlines announced a net loss of TWD32.35 billion ($968.9 million) for 2008, widened sharply from the $77.5 million deficit reported in 2007. Operating loss of TWD10.21 billion compared to $41.54 million the prior year. CI said fuel costs climbed 45% during the first three quarters of 2008 and falling demand offset declining fuel costs in the fourth. The company lost TWD21.05 billion on its fuel hedges.
3 April 2009
Cabo Verde Airlines "technical insolvency"
News reports state that Cabo Verde Airlines is in a situation of "technical insolvency," its board having asked the government to take measures to restructure the company.
The company’s situation has been set out in a letter from TACV director to its employees which explains the current financial situation and puts forward a series of proposals to avoid actual insolvency.
According to António Neves, the company has been accumulating “successive losses” over the years that has led to the situation of technical insolvency.
“The company has only survived because it has accumulated debts on top of debts. And also because the creditors have turned a blind eye and until now, not one has called for its closure – this spells insolvency,” says the letter, shown in the local press.
** Under the terms and conditions of IPP's policies cover is exlcuded with immediate effect for tickets and policies issued on or after 3rd April 2009
2 April 2009
TAM $577.4 Million loss for 2008
News reports state that TAM sank to a BRL1.34 billion ($577.4 million) loss in 2008, a reversal from the BRL468.6 million profit the Brazilian carrier earned in 2007, as its fuel hedges and the depreciation of the real eclipsed operational improvements.
31 March 2009
Air Berlin plunges to €75 million loss
News reports state that Air Berlin yesterday reported a €75 million ($99.6 million) loss for 2008, reversed from a €21 million surplus the prior year, but buttressed its long-term future with the sale of a 15.3% stake to Turkey's ESAS Holding and a share swap with TUI Travel's TUIfly.
ESAS, which operates Istanbul Sabiha Gokcen-based Pegasus Airlines, acquired the stake held formerly by Len Blavatnik. The shares were sold in January but the buyer was not revealed until Sunday. The deal is subject to approval by German competition authorities. The price was not disclosed.
30 March 2009
Air France KLM expects operating loss in current, coming fiscal years
News reports state that Air France KLM said last week that it likely will report a €200 million ($271.4 million) operating loss for its fiscal year ending March 31 and stated that its focus for the year beginning April 1 is "to limit our operating loss."
26 March 2009
El Al reports $39 million 2008 loss
News reports state that El Al posted a 2008 net loss of $38.8 million, reversed from a $44.8 million profit in 2007, citing fuel expenses.
The Israeli airline said high fuel prices in the first half of the year, followed by hedging charges in the second half when the price of oil dropped, led to a 45% year-over-year increase in fuel costs to $771.2 million.
26 March 2009
Shanghai Airlines posts $183 million 2008 loss
News reports state that Shanghai Airlines posts $183 million 2008 loss. Shanghai Airlines reported a 2008 net loss of CNY1.25 billion ($182.8 million), nearly tripling a net deficit of CNY435.12 million in 2007, on an 8.6% lift in revenue to CNY13.37 billion.
25 March 2009
Airline industry in ‘intensive care’
News reports state that Airline industry losses this year are expected to be nearly double the level forecast in December, as carriers are hit by steeply falling demand from premium passengers and by record falls in cargo traffic.
Giovanni Bisignani, director general of Iata, the airline industry trade association said on Tuesday: “The state of the airline industry today is grim. Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago”.
Relief from lower fuel prices had been “overshadowed” by falling demand and plummeting revenues, he said. “The industry is in intensive care.”
Net losses are forecast to reach $4.7bn this year, up from the $2.5bn forecast in December, as global economic conditions rapidly deteriorate.
Iata also revised its estimate for airline industry net losses for last year from $5bn to $8.5bn, as carriers were hit by the sudden and sharp fall in demand from lucrative premium passengers, where most network carriers generate the bulk of their profits, and from cargo.
25 March 2009
Major Airline failures more likely due to banking crisis
News reports state that the world banking crisis is making the risk of a major airline failure more likely because carriers will not be able to access funding for a rescue if they fall into trouble.
"Airlines are now in a very weak situation - they have debt of $170 billion so we are in a much worse position - we don't have cash," says Giovanni Bisignani, director general of IATA.
24 March 2009
Gol's full-year loss exceeds $600 million
News reports state that Gol and Varig parent Gol Linhas Aereas Inteligentes swung to a BRL1.39 billion ($606.7 million) loss in 2008 from a BRL272.3 million profit the prior year.
Key culprits in the deficit were a 31.5% year-over-year increase in expenses and BRL757.5 million in foreign exchange losses. Revenue was up 29.7% to BRL6.41 billion and costs rose to BRL6.5 billion, producing an operating loss of BRL88.6 million that represented a reversal from the BRL2.4 million profit reported in 2007.
17 March 2009
** SkyAirWorld collapses
News reports state that collapsed Australian regional carrier SkyAirWorld looks unlikely to return to the skies without a major cash injection from an angle investor.
The airline ceased operations after its five leased Embraer jets were repossessed back on Friday, March 13. It reportedly owes $10 million in payments.
Liquidators have been appointed, PA Lucas & Co, and they are assessing the unlikely potential for the carrier to continue trading.
** Under the terms of IPP's policies, cover is excluded for policies or tickets boughts on or after 13th March 2009.
17 March 2009
** East Star suspends operations
News reports state that East Star suspends operations as CNAC sale falls through. East Star Airlines was forced to suspend operations Sunday by CAAC owing to its heavy debt burden and the collapse of a stake sale deal with Air China parent CNAC.
It is the second privately held Chinese carrier to suspend service in recent months. Okay Airways stopped flying in December but resumed operations the following month.
Wuhan-based East Star has been in financial crisis since last year.
** Under the terms of IPP's policies cover is excluded with immediate effect for policies or tickets bought from 15th March 2009
16 March 2009
Authorities ground East Star Airlines
News reports state that authorities ordered a private Chinese airline to suspend its operations yesterday because of debts owed to General Electric Co’s aviation subsidiary, amid a travel slump caused by global economic turmoil.
East Star Airlines, based in the central Chinese city of Wuhan, was told to halt flights as of yesterday, the city government said in a statement.
16 March 2009
Aer Lingus reports €107.8 million 2008 loss
News reports state that Aer Lingus posted a 2008 net loss of €107.8 million ($136.7 million), a sharp reversal from the €105.3 million earned the previous year, citing "exceptionally challenging trading conditions for the aviation industry as a whole."
CEO Dermot Mannion said, "Falling consumer demand in key markets, a weakening dollar and sterling, and increased competition across the network combined to put sustained and significant pressure on our business throughout the year."
15 March 2009
Cathay posts $1.1 billion 2008 loss, first annual deficit since 1998
News reports state that Cathay Pacific Airways reported its first full-year net loss in a decade, posting a 2008 deficit of HK$8.56 billion ($1.1 billion), reversed from net income of HK$7.02 billion in 2007.
CX said the loss was attributable to shrinking passenger and cargo demand combined with a HK$7.97 billion noncash loss on fuel hedging that was reversed from a hedging gain of HK$933 million in 2007. It noted the "collapse" of the front end of passenger cabins and a "very weak" cargo market.
13 March 2009
BMI near £100 million 2008 loss
News reports state that Bmi lost nearly £100 million in 2008, plans cost cuts. Bmi Group yesterday confirmed a £99.7 million ($137.2 million) loss in 2008, reversed from a £7 million profit the prior year, and said it plans to reduce costs by an additional £45 million this year and is negotiating a pay freeze with employees.
3 March 2009
Thai Airways $592 million full-year loss
News reports state that Thai Airways reported a THB21.38 billion ($592.1 million) loss in 2008 compared to a THB4.43 billion profit in 2007 as the economic downturn and the protest-induced closure of Bangkok Suvarnabhumi in the fourth quarter proved too much to overcome.
Thai suffered a THB14.8 billion fourth-quarter loss that represented a reversal from a THB1.84 billion profit in the final three months of 2007
3 March 2009
AirAsia suffers $128 million 2008 loss
News reports state that AirAsia reported a 2008 net loss of MYR471.7 million ($128.3 million), reversed from a MYR697.6 million profit in 2007, but insisted its 2009 outlook is strong because its low-fare model is attracting new traffic and it has "unwound" fuel hedges that weighed down second-half earnings.
25 February 2009
Icelandair huge loss
News reports state that a huge fourth-quarter loss related to the collapse of Iceland's banking and financial sector last fall dragged Icelandair Group to a ISK7.47 billion ($65.9 million) full-year deficit, reversed from a ISL257 million profit in 2007.
24 February 2009
Air China loss
News reports state that Air China is blaming its fuel hedges for its 2008 loss and plans to shift more attention to boosting ancillary revenue to help engineer a turnaround this year.
The carrier reported a CNY6.8 billion ($993.2 million) noncash loss resulting from a Dec. 31 writedown in the value of its fuel hedges. It recorded cash losses of $5.9 million and $52.8 million on its fuel hedge contract in November and December respectively.
24 February 2009
Norwegian to $1.1 million full-year loss
News reports state that a nearly 50% year-over-year increase in revenue was not enough to save Norwegian from the damaging fluctuation in fuel prices last year as the LCC slid to a NOK7.6 million ($1.1 million) full-year loss from an NOK84.6 million profit in 2007.
Operating revenue soared 47.3% to NOK6.23 billion, driven in part by a 69.1% surge in ancillary revenue per passenger. But costs were up 61.9% to NOK6.03 billion as fuel expense more than doubled. Personnel costs jumped 73.5% and airport charges were up nearly 40% year-over-year. Full-year EBIT swung to a NOK337.9 million loss from an NOK84.6 million profit in 2007. It lost NOK104 million on its fuel hedges.
19 February 2009
ExpressJet's busy year ends with $88.2 million loss
News reports state that a year that featured the failure of ExpressJet Holdings' branded flying experiment ended with an $88.2 million net loss, widened 25.5% from the $70.2 million deficit reported in 2007.
Full-year revenue fell 21.8% year-over-year to $1.32 billion while costs were down 20% to $1.43 billion. Operating loss of $116.5 million increased 9% from the $106.9 million reported in 2007. Fourth-quarter loss of $30.2 million compared to a $31.7 million loss in the year-ago period. Three-month operating loss narrowed 72.9% to $8.7 million from $41.8 million.
16 February 2009
Air Canada's 2008 loss tops C$1 billion
News reporst state that Air Canada reported a 2008 net loss of C$1.03 billion ($827.6 million), reversed from a profit of C$429 million in 2007, citing "unprecedented volatility on fuel prices, significant fluctuations in foreign exchange and a worsening global economy."
The Canadian dollar, which provided AC a boost when it was on par with the US dollar in 2007 and early 2008, dropped rapidly in the fourth quarter, driving a net loss on foreign exchange of C$655 million last year. AC posted a C$317 million net gain on foreign exchange in 2007. "Foreign exchange turned against us," President and CEO Montie Brewer told analysts Friday.
13 February 2009
Air FranceKLM posts Q3 net loss of euro505 million
News reports state that Air France-KLM posts Q3 net loss of euro505 million. Air France-KLM says it posted a loss in the three months to December as the economic crisis deepened, hurting business class travel and cargo traffic and depressing fares.
Europe's largest airline reported Friday a net loss of euro505 million ($648 million) in its fiscal third quarter, compared with a profit of euro139 million a year earlier. It posted an operating loss of euro194 million, confirming a January warning.
9 February 2009
JAL posts $428 million third-quarter loss
News reports state that Japan Airlines parent JAL Group reported a net loss of ¥38.5 billion ($428 million) for its fiscal third quarter ended Dec. 31, reversed from a ¥13.1 billion net profit in the year-ago period, citing a "downward slide" in demand and "volatile" fuel prices.
6 February 2009
Shanghai Airlines suspends share trading
News reports state that Shanghai Airlines suspended trading in its shares yesterday as it anticipated a capital injection from the government. SAL noted in a statement that it is discussing with stakeholders an effort to reduce its debt ratio, which Board Secretary Xu Junming confirmed will occur through a capital injection. Its debt ratio was 91.4% on Sept. 31, 2008. Chairman Zhou Chi previously revealed that the airline requested approximately CNY3 billion ($438.5 million) from the Shanghai municipal government, SAL's controlling shareholder at 35.7%.
Chinese carriers expect to post a collective 2008 loss owing to the difficult operating environment. The government already has injected CNY7 billion and CNY3 billion into China Eastern Airlines and China Southern Airlines respectively. Industry analysts believe that the aid granted to SAL also is designed to smooth its merger with CEA. SAL warned last month that its 2008 loss may double the CNY435 million reported in 2007.
6 February 2009
Finnair falls to full-year loss, plots survival
News reports state that Finnair falls to full-year loss, plots survival. Claiming that its "situation as this relegation battle begins is stronger than many others," Finnair yesterday reported a €42 million ($54.4 million) loss for 2008 that compared to a €101.6 million profit in 2007.
"Not all airlines will survive. The industry will experience an unprecedented thinning out," President and CEO Jukka Hienonen said. But he claimed that Finnair's "balance sheet and cash position are strong and its strategy is working." He warned that it is "absolutely necessary to cut our cost structure permanently to a competitive level" and that the carrier is "seeking increasing flexibility in our expense structure" to handle fluctuating demand.
4 February 2009
Korean Air posts $1.4 billion full-year loss
News reports state that Korean Air reported a full-year 2008 net loss of KRW1.96 trillion ($1.4 billion), reversed from a net profit of KRW11.1 billion in 2007, citing the weak won as the biggest contributor to the heavy deficit.
3 February 2009
SAS Huge losses
News reports state that a stunning SEK6.32 billion ($754.7 million) full-year loss, reversed from a SEK636 million profit in 2007, prompted yesterday's unveiling of a new restructuring initiative dubbed Core SAS that will include a SEK6 billion rights issue and approximately 3,000 layoffs.
SAS Group President and CEO Mats Jansson said Core will "lead to SAS becoming a more focused and less complex company" concentrating on the Nordic market, business travelers, "efficient" organization, reduced costs and a "strengthened capital structure." The rights issue will comprise ordinary shares with a subscription period for shareholders tentatively scheduled for March 23-April 6.
3 February 2009
Kingfisher Airlines loss
News reporst state that Kingfisher Airlines, the airline company owned by Vijay Mallya-promoted UB Group, has reported a net loss of Rs 413 crore for the third quarter for the current financial year as against a net loss of Rs 427 crore for the corresponding period last year.
3 February 2009
Virgin America reports $175.4 million deficit - first nine months of 2008
News reports state that having lost a bid to receive confidential treatment for financial and traffic information that it is required to file with the US Dept. of Transportation as a certificated carrier, Virgin America yesterday said it suffered a $175.4 million loss in the first three quarters of 2008.
3 February 2009
ANA projects full-year deficit following ¥12.6 billion third-quarter loss
News reports state that a A ¥12.6 billion ($140 million) loss in its third fiscal quarter ended Dec. 31, reversed from a ¥12.4 billion profit in the year-ago period, combined with "the likelihood of the situation worsening in the foreseeable future," led ANA to predict its first full-year deficit since 2002-03.
30 January 2009
** Australia's MacAir leaves passengers stranded
News reports state MacAir's sudden move into receivership has meant thousands of its passengers are now left stranded.
All of today's flights were suspended, says an official at MacAir who wishes to remain anonymous.
She says the airline is offering passengers a full refund on tickets.
The official was unable to say when flights will resume because the carrier is now in administration and receivership.
MacAir late yesterday appointed Jonathan McLeod as administrator. He is principal of Brisbane-based corporate restructuring and insolvency firm McLeod & Partners.
One of the airline's largest creditors, Australian banking giant Suncorp-Metway, also earlier today appointed Justin Walsh as receiver and manager. He is from the Brisbane office of accounting firm Ernst & Young.
The state's transport minister John Mickel says in a statement today that it was the receiver that grounded the airline's entire fleet.
He says: "The director-general of Queensland Transport met today with the receivers ...and the receiver advised that it would seek to have flights resume as soon as possible".
** Under the terms of IPP's insurance policies cover is excluded for policies or tickets bought from today
30 January 2009
JetBlue Airways $76 million loss
News reports stahte that JetBlue Airways yesterday reported partial full-year and fourth-quarter results, including a $76 million pre-tax loss that represented a reversal from a $41 million pre-tax profit in 2007. It said it refrained from reporting net results because it is evaluating the tax deductibility of a $53 million noncash charge taken in the fourth quarter related to the valuation of its auction rate securities.
30 January 2009
Alaska Air suffers $135.9 million loss on hedges
News reports state that fuel hedge losses, restructuring charges and special items sank Alaska Airlines and Horizon Air parent Alaska Air Group to a $135.9 million net loss in 2008, reversed from a $124.3 million profit in 2007.
In the fourth quarter alone the company recorded an $80.2 million mark-to-market fuel hedge loss, $50 million in realized losses related to the early termination of fuel hedge contracts, restructuring charges of $9.2 million and $6.7 million in costs related to the disposal of Horizon's CRJ700s. It suffered a $75.2 million loss in the quarter compared to a $7.4 million profit in the final three months of 2007.
30 January 2009
US Airways records $2.2 billion 2008 loss
News reports state that US Airways posted a 2008 net loss of $2.21 billion, reversed from a $427 million profit in 2007, as it contended with a roller-coaster oil market that led to significant losses on fuel hedges.
In addition to $496 million of unrealized losses on mark-to-market hedging adjustments, US recorded a $622 million noncash charge to write off goodwill created by the America West Airlines merger. The carrier has moved quickly to reduce its hedging position in 2009. Executive VP and CFO Derek Kerr said 14% of its fuel consumption is hedged for the year, with none in the fourth quarter.
30 January 2009
Contiental posts $585 million 2008 loss
News reports state that Continental Airlines reported a 2008 net loss of $585 million, reversed from a profit of $459 million in the year-ago period, citing a deteriorating demand environment, a severe and "unprecedented" December winter storm at its Houston Intercontinental hub and special charges related to fuel hedging contracts and pension settlements.
29 January 2009
Iberia reports a 90.3% plunge from prior year with a €79 million operating loss
News reports state thta Iberia will report net income of €32 million ($42.2 million) for 2008, a 90.3% plunge from the prior year, it announced at an investors conference yesterday. It will suffer a €79 million operating loss on a 1.3% decline in revenue to €5.45 billion. Passenger revenue fell 2.5% to €4.22 billion. Operating costs rose 5.5% to €5.53 billion on a 45.5% surge in fuel expenses to €1.67 billion. Capacity dropped 0.5% year-over-year and load factor was down 1.6 points to 80%.
29 January 2009
AirTran posts $273.8 million 2008 loss
News reports state that AirTran Airways reported a 2008 net loss of $273.8 million, reversed from a $52.7 million profit in 2007, citing "multiple financial challenges" and noting that the result included nonoperating losses of $150.8 million related to its "out-of-the-money" fuel hedge contracts.
28 January 2009
Caribair - license suspended for 1 year
News reports state that Aviation officials have suspended the flying license of a small airline based in this Caribbean nation because it has failed to resolve safety concerns over unauthorized charter flights.
25 January 2009
** Swedish airline Nordic Airways looses license due to financial problems
News reports state that Nordic Airways, a Stockholm-based airline that launched its first commercial flights between western Europe and Baghdad earlier this month, has had its operating license revoked due to financial troubles, a Swedish Transport Agency official said Saturday.
Agency spokesman Anders Lundblad said the license was pulled Friday after the Stockholm County Court rejected the company's request for an extension to restructure itself.
Lundblad said passengers could be stranded because the fleet was grounded with immediate effect.
"It's very possible, since they can't fly back with them," he said.
Nordic Airway officials did not immediately return calls seeking comment.
In its decision, the agency cited the airline's ailing finances, saying it could "no longer fulfill its commitments and obligations toward its passengers."
Nordic Airways launched its Copenhagen-Baghdad route in the beginning of January with flights planned once a week between the Danish and Iraqi capitals.
The company had its permanent license replaced with a time-restricted temporary permit in October after it had applied for reconstruction due to financial difficulties. That license was due to expire on Feb. 15.
** Under the terms of IPP's insurance policies cover is excluded for tickets or policies bought on or after 24th January 2009
23 January 2009
Southwest suffers second quarterly loss
News reports state that Southwest Airlines followed up its first quarterly loss in 17 years with another in the fourth quarter of 2008, but it maintained its record of full-year profitability with a $178 million surplus that represented a 72.4% plunge from the $645 million earned in 2007.
22 January 2009
AMR posts heavy fourth-quarter, annual losses, sees capacity down 6.5% this year
News reports statet that American Airlines parent AMR Corp. reported a net loss of $340 million for the fourth quarter of 2008, propelling it into a full-year loss of $2.07 billion, its largest annual deficit since 2002 and a significant reversal from net income of $504 million in 2007.
Fourth-quarter results included a $23 million charge for aircraft groundings, facility writeoffs and severance related to previously announced capacity cuts and a noncash pension charge of $103 million "driven by a large number of early pilot retirements." Excluding these charges, AMR lost $214 million in the quarter compared to a loss of $184 million in the year-ago period excluding special items of $69 million inclusive. For the full year, the company lost $1.2 billion excluding special items, compared to income of $504 million ($420 million excluding special items) in 2007.
22 January 2009
UAL suffers $5.35 billion 2008 loss, announces 1,000 more job cuts
News reports state that United Airlines parent UAL Corp. kicked off the current reporting season yesterday with a troubling $5.35 billion net loss, reversed from a $403 million profit in 2007, and a pledge to cut an additional 1,000 positions from its roll of salaried and management employees.
The company suffered a $4.44 billion operating loss, compared to a $1.04 billion profit the previous year, on a 0.3% rise in revenue to $20.19 billion that was dwarfed by a 28.9% surge in expenses to $24.63 billion.
20 January 2009
Air France-KLM profit warning - third quarter loss
News reports state that Air France-KLM warned it would post a third-quarter operating loss after the economy deteriorated and fuel hedging backfired, sending its shares lower after the latest profit warning to hit the airline sector.
19 January 2009
Jet Airways loss
News reports state that Jet Airways reported a INR2.14 billion ($42.8 million) loss in its third fiscal quarter ended Dec. 31, widened from a INR911.2 million deficit in the year-ago period, and said that it will maintain focus on "domestic market consolidation" and "cost reduction initiatives," including plans to "rationalize our workforce."
The Indian carrier said falling fuel prices and rising yields helped it improve from a brutal fiscal second quarter in which it lost INR3.85 billion. Third-quarter revenue rose 24.6% year-over-year to INR30.23 billion while expenses climbed 24.7% to INR31.07 billion, deepening operating loss to INR840.6 million from the INR661.7 million suffered in the quarter ended Dec. 31, 2007.
17 January 2009
** FlyLAL grounded due to financial concerns
News reports stat that Lithuania's national carrier, FlyLAL-Lithuanian Airlines, had its operating certificate revoked Friday over fears that its financial troubles could affect flight safety.
As a result of the move, which was announced by the Lithuanian Civil Aviation Administration (LCAA), all FlyLAL-Lithuanian Airlines flights will be grounded indefinitely from Saturday.
'The certificate has been suspended due to the poor financial condition of FlyLAL,' said Kestutis Auryla of the LCAA.
Under the terms of IPP policies cover is no longer available for insurance or tickets issued with immediate effect
15 January 2009
Best Air Grounded
News reports state that The National Board of Revenue has sent a letter to the Civil Aviation Authority of Bangladesh requesting to cancel all Best Air flights as the private airlines failed to pay travel taxes amounting to Tk 2 crore.
In its letter, sent to the CAAB on January 13, the NBR stated that the Best Air had not paid travel tax of around Tk 2 crore for a long time.
14 January 2009
Air Mauritius loss
News reports statte that Air Mauritius said it suffered falling revenue and an "unprecedented deterioration of its financial performance" largely attributed to losses related to fuel hedges in its third fiscal quarter ended Dec. 31, leading to a nine-month loss of approximately €18 million compared to an €11.6 million profit in the year-ago period. The company realized a nine-month net loss of €20.5 million on its fuel hedging contracts and mark-to-market losses through the nine-month period totaled €129.5 million. It said it required some €65 million to meet future cash flow needs and will secure the funds through the sale of noncore assets, bridge loans and fresh capital. It now is projecting a full-year deficit of €23.1 million, reversed from a €15.6 million profit in the 2007-08 year.
13 January 2009
China Eastern significant 2008 loss
News reports state that China Eastern Airlines is taking a series of measures to curb rising operating costs and try to engineer a turnaround from what it expects to be a significant 2008 loss.
Already due a CNY7 billion ($1.02 billion) capital injection from the Chinese government, CEA said in a Monday filing with the Shanghai Stock Exchange that it suffered a CNY6.2 billion loss resulting from a writedown in the value of its fuel hedges on Dec. 31. It reported cash losses of $420,000 and $14.2 million on its fuel hedge contract in November and December respectively.
12 January 2009
Zambian Airways suspends operations
News reports statet that Zambia's privately-owned carrier Zambian Airways said on Saturday it had suspended operations with immediate effect, citing high fuel costs over the last year-and-a-half and the need to restructure its operations.
The airline said in a notice to passengers at Lusaka airport that it had experienced difficulties after jet fuel rose 100 percent in the last 18 months, increasing its operational costs by 50 percent.
"This created a lot of problems for Zambian Airways as a growing business. In the interest of our stakeholders and our employees, we have decided with immediate effect to suspend all our operations until further notice," it said.
Dozens of passengers flying to South Africa were left stranded, eye witnesses said.
9 January 2009
Chinese carriers - CNY7.7 billion net loss first 11 months of 2008
News reports state that Chinese carriers posted CNY7.7 billion net loss in first 11 months of 2008
Hit hard by the deepening global financial crisis, Chinese airlines posted a net loss of CNY7.7 billion ($1.13 billion) in the first 11 months of 2008, according to CAAC Vice Minister Yang Guoqing.
Yang noted in a conference this week that the carriers suffered from a sharp decline in demand last year, especially on international routes. Even Hong Kong and Macau slipped.
Based on the regulators' rough estimate, Chinese airlines transported 192 million passengers in 2008, down 13% from 2007. Cargo volume plummeted 14.8% to 4 million tonnes.
8 January 2009
** Speedferries goes into administration
Speedferries website states "The Joint Administrators regretfully announce the closure of Speedferries Limited (In Administration). The Joint Administrators have been exploring every possible avenue to save the business since 12 November 2008 and it is unfortunate that a buyer for the business has not been found.
Speedferries Limited (In Administration) will now cease to operate services between Dover and Boulogne and customers with pre-booked tickets are advised to seek alternative travel arrangements."
15 December 2008
Air Tanzania grounded
News reports state that During the past week the Tanzanian Civic Aviation Authority (TCAA) cancelled the airline's operating licence without further ado after an inspection revealed more than 500 operational gaps.
The International Air Transport Association (Iata) and the TCAA found serious gaps - among other things poor inspection of aircraft and a shortage of pilots and aircraft technicians.
11 December 2008
Advantage Rent A Car files for bankruptcy
** News reports state that Advantage Rent A Car has filed for reorganization under Chapter 11 in the bankruptcy court of Minnesota.
The San Antonio, Texas-based company said it is exploring options such as reorganization, a sale or a merger. As a result of financial strain, Advantage said that it is immediately consolidating its network of rental locations to focus efforts on the most profitable, highest volume sites.
** Under the terms of IPP's policies cover will be excluded for this company in respect of tickets or insurance issued on or after 9th December 2008
9 December 2008
Skymark Airlines loss
News reports state that Skymark Airlines of Japan expects to post a ¥2.1 billion ($22.6 million) loss in the fiscal year ending March 31.
9 December 2008
SkyEurope's full-year loss more than doubles
News reports state that SkyEurope Airlines reported a €59.4 million ($75.4 million) loss in the fiscal year ended Sept. 30, more than double the €24.1 million suffered in the prior year, as benefits from a restructured and streamlined network failed to materialize in time to offset record fuel costs
5 December 2008
OK Air forced to suspend flights
News reports state that China’s first private airline OK Air has suspended passenger flights because of financial and management problems.
Chief of the airline Wang Junjin said Wednesday the suspension from Dec 15 to Jan 15 would not affect movement of cargo business.
The company’s spokesperson Han Jing said the passenger sector accounted for 80 percent of its business.
‘The business suspension may break the company’s capital flow, and force the company into bankruptcy liquidation,’ she said.
5 December 2008
Flightline collapses
News reports state that Flightline Ltd, the Southend airport-based airline, went into administration yesterday.
26 November 2008
Financial losses ground United Eagle
News reports state that mounting losses have forced United Eagle Airlines, China's first registered private-owned airline company, to ground two of its aircraft, the Beijing Times reported Tuesday.
Junyao Group, the single largest shareholder of United Eagle, said those aircraft had been grounded since last Friday mainly because of cash flow problems. "The more aircraft we fly, the more debt we accrue," a company official of Junyao was quoted as saying.
According to the China Civil Airports Association, the airline currently owes 39.51 million yuan in airport charges as of March this year. The airline hasn't been paying airport fees since February 2007, the association said.
22 November 2008
** DayJet to fold after filing for Chapter 7
News reports state that DayJet Corporation's assets will be sold off to pay its creditors after the company filed Chapter 7 bankruptcy last week, nearly two months after grounding its fleet of 28 air taxi jets and eliminating most of its 160 jobs.
21 November 2008
Alitalia sees 2008 operating loss of 1 bln euros
News reports state that Alitalia will post an operating loss of 1 billion euros ($1.25 billion) in 2008, the airline's bankruptcy commissioner Augusto Fantozzi said at a news conference on Thursday.
21 November 2008
Air France KLM reports 96% profit plunge
News reports state that Air France KLM reported a 96.2% drop in consolidated net income for its fiscal second quarter ended Sept. 30 to €28 million ($35.4 million) from €736 million earned in the year-ago period.
18 November 2008
Gol heavy third quarter losses
News reports state that Gol and Varig parent Gol Linhas Aereas Inteligentes suffered a BRL294.3 million ($131,1 million) loss in the third quarter, reversed from a BRL45.5 million profit in the year-ago period, as special charges eclipsed improvement on the operating level.
17 November 2008
Korean Air's largest loss
News reports state that the dramatic collapse in the value of the won was blamed for Korean Air's largest single-quarter loss in 14 years, a KRW684.1 billion ($492.8 million) third-quarter deficit representing a reversal from a KRW129.6 billion profit in the year-ago period.
13 November 2008
SAS Group NOK 1.54 billion losses
News reports state that the SAS Group incurred NOK 1.54 billion losses for the 3rd quarter due to soaring fuel cost, decreasing passenger and the global financial crunch, the airline company reported recently.
12 November 2008
Asiana Airlines loss
News reports state that fuel costs and the weakening won combined to drag Asiana Airlines to a KRW47.9 billion ($36 million) loss in the third quarter, reversed from a KRW37 billion profit in the year-ago period.
11 November 2008
Cathy Pacific $85.5 million loss in first 6 months of 2008
News reports state that CX said in its statement to the Hong Kong Stock Exchange that "weakness in revenue and losses on certain fuel hedging contracts" would "affect the year's results adversely." It lost HK$663 million ($85.5 million) in the first half of 2008 after reporting a HK$7.02 billion profit last year.
11 November 2008
TAM $52.2 million loss
News rerports state that TAM suffered a BRL112.7 million ($52.2 million) loss in the third quarter, reversed from a BRL48.5 million profit in the year-ago period, despite a 40.5% surge in operating revenue to BRL2.9 billion. The Brazilian carrier's costs grew 36.2% to BRL2.73 billion but BRL301.5 million in financial charges, owing mainly to losses on fuel hedges, dragged its operating result into the red. Operating loss was BRL152.9 million compared to a BRL78.3 million profit last year.
10 November 2008
Alma de Mexico files for bankrutcy
News reports state that Alma de Mexico suspended operations and filed for bankruptcy last Friday, citing the "crisis" in the industry and global economy.
* Under the terms of our policy wording cover is excluded for all cover purchased from Friday 7th
10 November 2008
Air Canada C$132 million loss
News reports state that Air Canada reports C$132 million loss on fuel costs, noncash charges
Air Canada posted a third-quarter net loss of C$132 million ($112.4 million), reversed from a C$273 million profit in the year-ago period, saying its results were hurt by high fuel costs and noncash losses on fuel hedging and currency items.
10 November 2008
Air Mauritius €13.4 million loss
News reports state that Air Mauritius lost €13.4 million ($17.3 million) in the fiscal first half ended Sept. 30, reversed from a €2.5 million profit in the year-ago semester. Revenue rose 8.5% year-over-year to €216.1 million but the airline said it could not overcome a 17.5% increase in operating costs driven by a 49% surge in fuel expenses.
4 November 2008
Jetride Inc. Grounded
News reports state that not quite six years after it started, Jetride Inc. (formerly known as Pinnacle Air LLC), has surrendered its flight operating certification to the Federal Aviation Administration. On Monday, all planes were officially grounded and the company's operations as an airline ceased, said Roland Herwig, a spokesman for the FAA in Oklahoma City.
3 November 2008
Hainan, Shanghai plunge to third-quarter losses
News reports state that Hainan Airlines and Shanghai Airlines posted third-quarter net losses of CNY260.8 million ($38.1 million) and CNY437.4 million respectively as declining domestic demand and high fuel prices continued to wreak havoc on China's airlines
3 November 2008
Finnair - a €17.3 million third-quarter loss
News reports state that admitting that "conditions for profitable business are increasingly marginal," Finnair reported a €17.3 million third-quarter loss, reversed from a €39.6 million profit in the three-month period ended Sept. 30, 2007.
31 October 2008
China Southern suffers loss
News reporst stat thta China Southern Airlines yesterday reported an CNY810 million ($118 million) net loss for the third quarter, joining "big three" rivals Air China and China Eastern Airlines deep in the red.
30 October 2008
China Eastern Airlines suffered a CNY2.33 billion net loss
News reports state that China Eastern Airlines suffered a CNY2.33 billion net loss in the third quarter, reversed from a CNY976.5 million profit in the year-ago period, on a 13.7% decrease in operating revenue to CNY10.81 billion. Board Secretary Luo Zhuping attributed the result to the "continuous decline of domestic market demand caused by the worsening economic environment
29 October 2008
Pakistan International Airlines posts a PKR20.4 billion ($249.2 million) loss
News reporst state that Pakistan International Airlines posted a PKR20.4 billion ($249.2 million) loss in the third quarter, widened from a PKR3.15 billion deficit in the year-ago quarter. Nine-month loss increased to PKR38.4 billion from PKR10.9 billion in year-ago period.
29 October 2008
Austrian Airlines Group €16.4 million net loss
News reporst state that Austrian Airlines Group reported a €16.4 million ($20.5 million) net loss in the third quarter, reversed from a €29.2 million profit in the year-ago period, but said it is "confident" that its delayed privatization "can be finished in a positive way."
29 October 2008
Air China plunges to CNY1.9 billion loss
News reporst state that Air China suffered a net loss of CNY1.9 billion ($276.5 million) in the September quarter owing to weak domestic market demand and fuel hedge writedowns, a big reversal from the CNY2.2 billion profit in the year-ago quarter.
Operating revenue fell 3.8% to CNY13.92 billion against a 24% increase in operating expenses to CNY15.09 billion. CA Chairman Kong Dong noted that "market demand has become one of the major factors affecting profitability as international oil prices have substantially declined recently." The carrier also said in a Shanghai Stock Exchange statement that the sharp drop in fuel prices during the quarter resulted in hedge-related losses.
Third-quarter passenger boardings fell 9.4% year-over-year to 8.7 million as traffic was affected significantly during July and August by security requirements related to the Beijing Olympics. Domestic load factor sank 8.91 points to 74.8% and international loads dropped 10 points to 72.1%. Cargo traffic dipped 9.5% to 910 million FTKs.
Nine-month loss was CNY657.3 million on a 6.6% lift in operating revenue to CNY39.68 billion.
29 October 2008
** Sterling Airlines to File for Bankruptcy Protection Today
News reports state that Sterling Airlines A/S will file for bankruptcy today after its Icelandic owner ran out of capital to support the business and after the company was unable to enter a deal to divest itself.
``Negotiations have been conducted with several potential investors, but it was impossible to make ends meet,'' the company said in a statement on its Web site today. ``The inevitable result is that Sterling Airlines has no option but to file for bankruptcy.''
Sterling's owner Palmi Haraldsson had sought to find a partner for the airline, after rising fuel costs and less demand for air travel reduced the company's profitability. Haraldsson's plans to inject enough capital in the company to keep it liquid until 2009 were undermined by the collapse of the Icelandic financial system, Sterling said. Iceland on Oct. 24 secured a $2.1 billion loan from the International Monetary Fund.
``Over a three- to four-week period, the whole financial system melted down, and that resulted in our shareholder being unable to continue his support to the company,'' Sterling said.
Sterling customers who bought their tickets on the company's Web site won't be refunded, according to the statement. Sterling is advising customers who bought their tickets by credit card to contact the credit card company or bank, while people who bought tickets through travel agents should contact them, the company said.
** Under the terms of IPP's insurance cover is excluded for this airline for cover or tickets issued with immediate effect
28 October 2008
Jet Airways suffers steep second-quarter loss
News reports state that Jet Airways reported a INR3.85 billion ($71.5 million) loss in its fiscal second quarter ended Sept. 30, reversed from a INR283 million profit in the year-ago period, as the grave conditions that forced it into an alliance with rival Kingfisher Airlines and prompted Jet's failed attempt to cut 1,900 jobs wreaked havoc on its P&L.
"The impact of the global meltdown and the resultant slowdown in traffic has been felt by airlines across the world and India has been no exception to this," Jet said, while stating that the September quarter "is historically the weakest quarter of the year in terms of demand"
24 October 2008
Alaska Air Group posts loss
News reports state that Alaska Air Group, like several US counterparts, suffered a third-quarter loss owing to a decline in the mark-to-market value of its fuel hedges, reporting an $86.5 million deficit that compared to an $81.8 million profit in the third quarter of 2007.
24 October 2008
AirTran reports $107.1 million quarterly loss
News reports state that AirTran Airways posted a third-quarter net loss of $107.1 million, reversed from a $10.6 million profit in the year-ago period, due in part to losses of $41.5 million related to its fuel hedging program owing to the recent fall in oil prices.
24 October 2008
US Airways posts a US$862 million loss
News reports that US Airways reported a third-quarter net loss of $862 million, reversed from a profit of $177 million in the year-ago period, and like other US carriers cited fuel hedging charges as a principal cause.
23 October 2008
Northwest Airlines reported a third-quarter net loss
News reports state that Northwest Airlines reported a third-quarter net loss of $317 million, reversed from a $244 million profit in the year-ago period, citing a $410 million noncash charge related to fuel hedging as the reason.
22 October 2008
SkyEurope does not fulfill its payment plan
News reports state that SkyEurope Airlines "did not fulfill its payment plan" with Austrian Airlines Group and no longer will have its 737-700s serviced by Austrian Technik, AAG CEO Alfred Oetsch told Vienna's Die Presse. In addition, several SkyEurope aircraft were not refueled at VIE last week owing to unpaid fuel bills. US investor York Global Finance, which holds 29.9% of the LCC, plans to lead a consortium that intends to take a complete or majority stake. It hopes to finalize the deal at a board meeting scheduled for Nov. 10.
22 October 2008
United posts $779 million loss
News reports state that United Airlines parent UAL Corp. reported a third-quarter net loss of $779 million, reversed from a net profit of $334 million in the year-ago period, blaming the bulk of the result on a $519 million noncash net loss on fuel hedge contracts caused by the recent drop in oil prices.
The net loss excluding the hedging losses and noncash accounting charges was $252 million. Chairman, President and CEO Glenn Tilton said that lower fuel prices will have "a significant positive impact" on earnings going forward, though he cautioned that "the forces [driving down] fuel prices are also affecting the global economy," likely leading to reduced demand.
Speaking to reporters and analysts, Tilton added that the weak economy and "volatile" fuel costs have led the airline to institute a "cost-conscious culture, which in many ways is not what our reputation has been historically. . .At the end of the day we've got to run this business to make a real margin and if that means that the business has to be smaller, so be it."
20 October 2008
Austrian predicts heavier full-year loss
News reports state that Austrian Airlines Group issued a new forecast last week "based on the already observed as well as expected declines in bookings," and now is expecting a 2008 net loss before special items of €100-€125million ($134.5-$168.1 million).
It predicted a €70-€90 million loss in July. It said that "noticeable consequences for the aviation industry due to the general financial and economic crisis are also expected for the coming months" and that lower fuel costs would not compensate for sales-related revenue losses.
17 October 2008
** LTE International Airways cease operations
News reports state and LTE's website states:-
"Lte International Airways S.A. wish to inform you that due to the financial situation of the company, that make it difficult to meet the operational expenses in the next days, we have had to suspend our charter and scheduled operations.
Lte is doing everything to minimize the impact of this suspension of services on its clients and providers. After 20 years operating with maximum dedication to our clients it just was not possible to avoid this situation given world events lately.
We apologize for the inconvenience this may cause to our passengers, clients and suppliers.
Lte International Airways S.A."
* COVER UNDER IPP's POLICIES WILL CEASE WITH IMMEDIATE EFFECT
17 October 2008
Air China expects loss
News reports state that Air China told the Shanghai Stock Exchange yesterday that it expects to report a nine-month deficit owing to falling demand and fuel hedge losses. It did not reveal specific figures. Its profit through the first nine months of 2007 was CNY3.5 billion and it was CNY1.24 billion in the black through the first half of 2008
17 October 2008
Indian downturn, Kingfisher reports loss
News reports state that volatility in the Indian market continued yesterday as Air India said it is working on a plan to offer unpaid 3-4-year leave to up to 15,000 employees and Kingfisher Airlines reported a heavy third-quarter loss.
The AI announcement came one day after Jet Airways, which had just unveiled its alliance with former rival Kingfisher, revealed a controversial plan to lay off approximately 1,900 workers.
AI told the Press Trust of India that the "scheme is purely voluntary," and Chairman and MD Raghu Menon said those who accept the furlough (if approved by the carrier's board) will be allowed to return at the same seniority and pay level. AI employs around 23,000. Civil Aviation Minister Praful Patel told PTI that there will be no permanent cuts, although the current market downturn "will affect the growth plans [and] future employment opportunities."
In the meantime, the government will infuse INR15 billion ($300.4 million) of new equity into AI and extend a INR20 billion soft loan "if needed," in addition to talking to private firms and investors on AI's behalf, Patel told Hindustan Times. "The time is not right" for an IPO, he said.
Meanwhile, Jet's decision continued to meet with protest from unions and politicians and Chairman Naresh Goyal agreed to meet with local political figures next week, the BBC reported. Patel told PTI he would "talk to all airlines to see that such large-scale loss of jobs does not happen and try to find a way out."
Jet's new partner promised that its employees' jobs are safe for the time being, but the losses continue. Kingfisher yesterday said it lost INR1.88 billion through the nine months ended March 31, narrowed from a INR2.44 billion deficit in the year-ago period. It has changed the end of its fiscal year to March 31 from June 30 and will not report a 12-month result.
17 October 2008
Continental reports big loss, defers aircraft deliveries
News reports state that Continental Airlines yesterday reported a third-quarter net loss of $236 million, reversed from a $241 million profit in the year-ago period, and announced that it has pushed back delivery of 18 aircraft scheduled to arrive over the next two years.
Two 777s will be delivered in 2010 instead of 2009 and 16 737NGs slated for 2009-10 have been deferred to 2011 and beyond with no new schedule set. CO still is scheduled to take delivery of 14 737NGs next year, though executives concede that the Boeing machinists strike could push some of those back as well.
Chairman and CEO Larry Kellner called the delayed deliveries "prudent moves in uncertain times" and said the carrier is hunkering down for a difficult period. "We know that demand for air travel will be adversely affected by the recession," he told analysts and reporters.
17 October 2008
Fuel hedges drag Southwest to first loss since 1991
News reports state that the fuel hedges that helped Southwest Airlines stay profitable while surging oil prices crippled its US rivals now have resulted in the carrier's first quarterly net loss in 17 years, a $120 million deficit that represented a reversal from the $162 million profit reported in the third quarter of 2007.
16 October 2008
9 Airlines Grounded Over Unpaid Debts
News reports stat that nine airlines will be grounded by the end of the week due to overdue debts, aviation authorities announced Wednesday.
Three of the airlines -- Interavia, Dalavia and Omskavia -- had all but suspended flights already, stranding hundreds of passengers.
Moscow-based Interavia, which topped the list with an overdue debt of 19.2 million rubles, has not flown since Oct. 9, missing 23 flights as of Wednesday, according to the web site of Domodedovo Airport.
Other big debtors include state-owned Dalavia, with 18.4 million rubles in overdue payments, and Omskavia, part of the troubled AirUnion alliance, with late payments of 4.9 million rubles.
The Federal Navigation Authority said the airlines had repeatedly been asked to pay their debts and that, in line with legislation, they had gotten a warning, followed by restriction of services on charter flights and now suspension of services for all flights, Interfax reported.
The process of withdrawing Interavia's license might start on Oct. 26, the report said.
An Interavia representative at Domodedovo Airport said hundreds of passengers were waiting for information about when they could expect to fly.
"We do not know when the airline's services will resume," he said. "We do not know anything except that the airline is deeply in debt and we have not been paid for three months."
Domodedovo spokesman Ildar Tuzmuhametov said the airport was waiting for the carrier to take action but would not comment on how soon the problems might be resolved or what was causing the delays.
9 October 2008
Alaska Air Group losses
News reports state that Alaska Air Group expects to suffer a "significant" third-quarter loss on a GAAP basis resulting from a $220 million mark-to-market loss on the value of its fuel hedges and other special items, it said in a filing with the US Securities and Exchange Commission.
7 October 2008
** Sun Country files for bankruptcy
News reports state that Sun Country Airlines yesterday filed for Chapter 11 bankruptcy protection, but insisted it will "operate business as usual."
* Under the terms of our policy cover is excluded for this airline as from 6th October 2008
6 October 2008
Sun Country warns of possible shutdown
News reports state that Sun Country Airlines faces an uncertain future following last week's resignation and arrest of its former chairman, warning employees that a shutdown by Dec. 1 is "a distinct possibility."
The Minneapolis/St. Paul-based carrier that operates a fleet of nine 737-800s on scheduled services and charters to points in the US, Mexico and the Caribbean was rocked last week when parent company Petters Group Worldwide's headquarters offices were raided by the FBI and Internal Revenue Service. Tom Petters, chairman of the company and also of SCA, abruptly resigned his posts after his home was raided. He was arrested Friday by the FBI and charged with mail fraud, wire fraud, money laundering and obstruction of justice.
Sun Country was not implicated in the federal probe, but it faces a credit crunch as a result of the scandal. President and CEO Stan Gadek assumed the role of chairman and said the airline must gain its financial independence from PGW, proposing that its 850 employees take a temporary 50% pay cut for the remainder of the year.
SCA General Counsel John Fredericksen told employees in a letter last week that the carrier faces a "serious financial crisis," adding, "Should Sun Country not be able to obtain additional financing or obtain relief from our major creditors in the near future, there is a distinct possibility that the airline will be shut down and/or you will be furloughed." The company insisted it is confident it can find a solution, noting that it is required by US law to inform workers 60 days in advance of possible job losses.
3 October 2008
Air Fiji aircraft grounded
News reports state that a Legal battle is looming for Air Fiji after its major fuel supplier, BP Oils, said it was forced to take legal action against the company to recover unpaid debts.
The revelation came as the airline cancelled its trips to Labasa yesterday reportedly because of a lack of fuel, leaving passengers stranded at the airport.
An airline source said flights up to Monday had been cancelled awaiting results of a legal dispute.
1 October 2008
** AiRUnion shuts down
** News reports state that AiRUnion, the failed Russian airline alliance that comprised five carriers, ceased to exist Tuesday as the management company shut down.
The Russian government intended to replace AiRUnion with a state-owned grouping of nine airlines, but AiRUnion COO Gustav Baldauf said that "we are still working on a concept for a follow-up company" and that decisions on how the replacement alliance would function "will take some time."
Talks with the government are on hold and Atlant-Soyuz Airlines, the Moscow-owned carrier that was supposed to take over AiRUnion's flights, still is awaiting certification to do so.
** Cover for this airline was withdrawn for all policies or tickets issued on or after 22nd August 2008
1 October 2008
Italy's Air Bee to stay grounded for three more weeks
News reports state that grounded Italian carrier Air Bee has extended the suspension of its operations for a further three weeks until 23 October.
The Brescia-based carrier, which launched operations earlier this year, suspended its flights on 11 September for three weeks. It cited difficulties of being in the start-up phase of its business given the uncertainties in the Italian air sector amid continued efforts to privatise ailing flag carrier Alitalia.
In a brief statement on its website, Air Bee now says its operations will remain suspended until 23 October.
22 September 2008
** DayJet collapses
News reports state that Air taxi pioneer DayJet Services, LLC has ceased all jet services, according to a company statement issued on Friday. Stating on their website "As of September 19, 2008, DayJet Services, LLC, has discontinued its jet services and cancelled all future flights as a result of the company’s inability to arrange critical financing in the midst of the current global financial crisis.
We regret the disruption and hardship caused by the sudden shutdown of DayJet services to our customers, employees, DayPort communities, suppliers and stockholders. Unfortunately, DayJet is unable to honor customer reservations or issue refunds."
** In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
19 September 2008
Aviation body could ground Alitalia in 10 days
News reporst state that Italy's civil aviation authority ENAC will ground Alitalia flights in 7-10 days from next Monday if the special administrator does not present a new rescue plan to them that day, a source at ENAC said on Friday.
"From Monday if there is no news proceedures will be started and within a week, 10 days at most, if there is no positive outcome Alitalia flights will be stopped," said the source.
The airline's special administrator, Augusto Fantozzi, is due to meet the aviation body on Monday after Italian consortium CAI withdrew its offer to buy part of the airline on Thursday, in the face of union opposition to job losses.
19 September 2008
Berlusconi: Alitalia 'on the edge of an abyss' after CAI withdraws rescue offer
News reports state that Alitalia's future is in serious doubt after Italian investment group CAI yesterday withdrew its €1 billion ($1.4 billion) offer to rescue the airline.
"I received confirmation from CAI that it has withdrawn its offer," Prime Minister Silvio Berlusconi told reporters. "We could be on the edge of an abyss." He previously had warned AZ's workers that there was "no alternative" to CAI's plan and all 20,000 employees would lose their jobs if talks between labor and the investment consortium collapsed.
Six of the carrier's nine unions, including pilots and flight attendants, refused to accept concessions contained in the CAI proposal. A deadline set by the consortium passed yesterday without labor groups' agreement to the rescue plan and CAI issued a statement saying its members had "unanimously" voted to withdraw their offer.
While the airline's aircraft were expected to fly today, AZ Administrator Augusto Fantozzi said earlier this week that money needed to keep the airline operating was "about to run out."
17 September 2008
Olympic Airlines to shut down
News reports state that Olympic Airlines will be shut down and restarted as Pantheon Airways early next year pending European Commission approval of a Greek government plan to rescue the loss-making carrier. Under the plan, Pantheon would be privatized, likely including foreign investment. It would continue operating Olympic's domestic network but would cut back international routes and be about 65% of Olympic's size. Several thousand jobs would be eliminated. Greek Minister of Transport Kostas Chatzidakis said OA is one of Europe's worst performing companies and cannot continue in its current form.
12 September 2008
XL Travel Group Bust - Thousands Stranded
News reporst state that XL Leisure Group Plc, the U.K.'s third largest tour operator, went into administration early today, leaving tens of thousands of passengers stranded, with the company blaming rising fuel costs and the economic slowdown.
The U.K.'s Civil Aviation Administration said as many as 89,000 people could be stranded overseas with another 200,000 holding advanced bookings with the privately held company and its units.
XL Leisure, XL Airways UK Ltd., Excel Aviation Ltd., Explorer House Ltd., Aspire Holidays Ltd., Freedom Flights Ltd., Freedom Flights (Aviation) Ltd., The Really Great Holiday Company Plc, Medlife Hotels Ltd., Travel City Flights Ltd. and Kosmar Villa Holidays Plc are all in administration, XL said in a statement on its Web site this morning.
``The companies entered into administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding,'' XL said in the statement.
11 September 2008
AiRUnion will disappear this month
News reporst state that AiRUnion COO Gustav Baldur said the struggling Russian airline alliance will be shut down at the latest by Sept. 30.
Speaking at an international symposium of the Austrian Aviation Assn., Baldauf said the AiRUnion project had failed. "Now we will present a new concept [to the State of Russia] today in Moscow [to show] how a replacement airline project could be functional."
He added that the alliance will enjoy a state guarantee for fuel purchases until Sept. 14. After that date, Atlant-Soyuz, which also will be a member of the new alliance, will be the vehicle to operate AiRUnion flights until the end of the month. Then the first airline alliance in Russia will be history.
The new state-owned alliance, which should comprise nine carriers, will be owned 51% by Russian Technology with the other shares split between the cities of Krasnojarsk and Moscow.
Russian aviation experts told this website that the new airline cluster will be much more complex than the former AiRUnion, which included just five carriers, and expressed skepticism about the project. As yet, the new grouping does not have a name.
9 September 2008
New Alitalia will be organized by Nov. 1
News reports state that according to Italian Minister of Productive Activities Claudio Scajola, who told media that the country "need[s] an airline which can be competitive as soon as possible," according to Bloomberg News. It will not be an easy road, however, as at least five unions yesterday rejected the layoffs and new contracts necessary to the government's rescue plan. Leaders of nine unions met yesterday with the Compagnia Aerea Italiana investment consortium, but talks were suspended owing to what union sources said were job contracts that were "unacceptable in their approach," Reuters said. Negotiations were set to resume last night.
The ANPAC and UP pilot unions left the table during the day, telling the AGI news service that "the problems of the pilots cannot be faced together with those from other categories, given the specificity of our work," while one official told Reuters that a positive outcome was "very remote for the time being." Pirelli Chairman Marco Tronchetti Provera told reporters that the rescue plan "is valid from an economic standpoint" and that the tire maker may invest €10-€20 million ($14.3-$28.5 million) in the new airline, Bloomberg reported. AZ Administrator Augusto Fantozzi told Il Sole 24 Ore that CAI offered €400 million for AZ's assets.
8 September 2008
** Futura seeks bankruptcy protection
News reports state that Palma, Mallorca-based Futura International Airways suspended flights today as it sought bankruptcy protection, the Spanish Infrastructure Ministry confirmed, but the carrier intendeds to restart operations tomorrow.
The ministry said it asked Futura to present information on its financial situation, a plan for reorganization and guarantees on the security of its flight operations by Friday in order to determine whether it could retain its operating license.
The Spanish CAA will open an inquiry to verify whether Futura respected its legal obligations to passengers as a result of its "unilateral" decision to suspend operations.
According to the airline's website, its fleet comprised 38 737s last year. It added two 737-900ERs this year (ATWOnline, March 19, 2007). Revenue was €327 million ($466.4 million) in 2007 and it carried 3.7 million passengers. It operates charter flights and leases out several aircraft to other tour operators and charter carriers. It was founded in 1989 with the participation of Aer Lingus, which sold off its majority stake in 2002 and its remaining 20% last October.
Futura International's Dublin-based subsidiary Futura Gael said it had suspended operations for an undetermined period. The Irish CAA has revoked its AOC.
** In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
4 September 2008
Airlines to lose USD5.2 billion in 2008
News reports state that The International Air Transport Association (IATA) announced a revised industry financial forecast that would see the global airline industry post losses of USD5.2 billion in 2008 based on an average crude oil price of USD113 per barrel (USD140 for jet fuel). Giovanni Bisignani, IATA’s Director General and CEO said, “The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability. We expect losses of USD5.2 billion this year.”
1 September 2008
Struggling SkyEurope suffers deepening losses
News reports state that SkyEurope Airlines suffered a €16.8 million ($24.8 million) loss in the fiscal third quarter ended June 30, widened from a €5.1 million deficit in the year-ago quarter, as high fuel prices offset the company's continuing efforts to cut costs and streamline its operation.
The airline said it responded by raising fares and cutting capacity in addition to eliminating "poor performing" routes (ATWOnline, July 23), but revenue rose just 0.1% year-over-year to €67.9 million and EBIT declined to a €14 million loss from the €5.2 million lost in the year-ago quarter.
29 August 2008
Airline collapse hits thousands
News reports state that hundreds of people have been left stranded and up to 45,000 have lost bookings after the collapse of the low-cost transatlantic airline Zoom.
The carrier suspended all its flights, blaming the economic downturn and steep rises in fuel bills.
*** Cover was withdrawn for this airine on 2nd June 2008 for all policies or tickets issued on or after this date
29 August 2008
Alitalia board OKs bankruptcy protection
News reports state that Alitalia's board on Friday formalised a request to seek bankruptcy protection, Corrado Passera, the CEO of the stricken carrier's sale adviser Intesa Sanpaolo said.
Alitalia's board is meeting in Rome to approve its first-half results and discuss a rescue plan drawn up by Intesa that foresees splitting the airline into two.
Its loss-making units are to be left under bankruptcy protection while its healthy parts will be acquired by a holding company composed of 16 Italian investors in an effort to create a smaller, leaner airline with control of the Italian market.
Air France KLM and Lufthansa are tipped as frontrunners to buy a minority stake in the restructured carrier, which needs a foreign alliance over the long term.
Smaller Italian carrier Air One will be folded into the restructured airline, which is expected to focus on short and medium haul routes and will operate with a much smaller fleet and about 40 percent fewer employees.
Passera said new foreign investors would join the Italian consortium in the coming days, without specifying names. He said the bank had received a letter from Air France-KLM acknowledging the rescue plan.
The French-Dutch carrier said on Thursday it would be willing to take a minority stake in the restructured Alitalia provided it returned to profitability.
Speaking to reporters at a conference in northern Rimini, he warned the next four weeks would be crucial to determine whether the rescue plan could be accomplished, and said a deal with Alitalia's notoriously strike-prone unions would be important.
* In accordance with the terms of our policy, cover for Scheduled Airline Failure was withdrawn on 3rd April 2008, policies issued or tickets issued prior to this date will be covered.
28 August 2008
Aer Lingus swings to first-half loss, predicts full-year deficit
News reports state that citing unprecedented fuel costs, slowing economic growth in its main markets and weakness in the US dollar and UK pound, Aer Lingus reported a net loss of €20.6 million ($30.3 million) for the first half of 2008, reversed from a €6.8 million profit in the year-ago semester.
Revenue rose 10.2% year-on-year to €633 million while operating costs increased 14.6% to €655.2 million, with fuel costs soaring 48.7% to €172.4 million in spite of hedging savings and dollar weakness. Fuel represented 26.3% of total costs in the period, up 6 points. Operating loss was €22.3 million, reversing a profit of €2.6 million in the first half of 2007.
28 August 2008
** ZOOM Airlines plans to appoint administrators
News reports state that Zoom Airlines is seeking protection from creditors and plans to appoint administrators in the UK and Canada.
The airline said the move would freeze the demands of its creditors while it negotiated fresh investment and continued operating services between the UK, Canada and the US.
It came after a Zoom flight headed for Glasgow and Gatwick via Vancouver was grounded at Calgary when the aircraft’s owner terminated Zoom’s lease because of unpaid bills.
Executive chairman Hugh Boyle apologised to passengers and said the problems had been caused by “acutely difficult” trading conditions and the “horrendous” increase in fuel prices – which had added $50 million to its operating costs.
Boyle said: “Zoom Airlines Limited, based at London Gatwick and Zoom Airlines Inc, based in Ottawa Canada, have sought creditor protection by filing legal notices of intention to appoint an administrator in both the UK and Canada.
“The airline’s flights will continue to operate and the decision to instigate creditor protection proceedings means that the demands of existing creditors are frozen while we continue negotiations on an investment package which already are at an advanced stage.
“This situation has resulted in delays for passengers last night and today and we are working extremely hard to get our flights back on schedule. We sincerely apologise for the inconvenience this has caused passengers.
“Our trading position is a direct consequence of the horrendous increase in the price of aviation fuel and the economic climate.
"The rise in the price of fuel resulted in a $50 million increase in our operating costs during the last year alone and that coupled with the general economic downturn has led to difficulties which are being felt throughout the industry.”
Passengers on the grounded aircraft had been found an alternative flight. Other services had been delayed as a result and Zoom was trying to get schedules back to normal.
** Cover for this airline under IPP's policies was withdrawn for this airline on 2nd June 2008
28 August 2008
Zoom flights grounded at Glasgow
News reports state that HUNDREDS of travellers were stranded at Glasgow Airport today after two flights were grounded because of technical and alleged financial problems.
A Boeing 757 belonging to Zoom Airlines was stopped from taking off for Halifax, Canada, shortly before 11am after the Civil Aviation Authority enforced a detention order. More than 200 people were aboard.
A second flight to Canada, due to leave at noon for Vancouver, was delayed for 12 hours.
Zoom said the plane that had been due to leave Canada to pick the 156 people up had developed a technical fault and a replacement was being flown from London Gatwick to Glasgow tonight.
But reports from Canada said that plane had been grounded due to financial problems.
The chaos left more than 360 people stranded.
The detention order on the plane at Glasgow Airport had been served by CAA chiefs on behalf of Euro Control - the organisation responsible for air space across Europe. Euro Control claims it is owed a substantial sum by Zoom.
A second detention order was also placed on the plane by the UK's National Air Traffic Agency for alleged non-payment of charges.
BAA also enforced a third detention order due money, it is claimed, owed by the airline in connection with services in and out of Glasgow.
Earlier today passengers flying from Paris to Vancouver were stranded in Calgary when the Zoom plane stopped to refuel.
According to reports from Canada, the fuel supplier refused to give any aviation diesel to Zoom because of unpaid bills while the leasing company detained the plane because of money owed.
But Zoom spokesman Ramsay Smith said flights would continue as normal in the days and weeks ahead. He refused to discuss allegations of unpaid debts.
A BAA official said: "BAA Glasgow has been instructed by the Civil Aviation Authority to detain a Zoom Airlines Boeing 757 for the non-payment of charges to Eurocontrol, the European organisation for the Safety of Air Navigation, and NATS, the air traffic services provider."
** Cover for this airline under IPP's policies was withdrawn for this airline on 2nd June 2008
28 August 2008
Halted airliner strands dozens
News reports state that plans for dozens of air travellers were dashed Wednesday night when a charter flight bound for the United Kingdom was grounded at the Calgary airport after the company that owns the aircraft terminated its lease with Zoom Airlines because of unpaid bills.
The 69 passengers were booked on the Boeing 767 flight to Glasgow and London's Gatwick airport Wednesday night. But they were stranded and left clamouring for information at the Zoom check-in desk, after being told the aircraft was "no longer available."
Calgary Airport Authority spokesman Bryce Paton said the flight arrived in Calgary from Paris Wednesday afternoon and was expected to continue on to Vancouver when it was grounded.
"It's an aircraft that Zoom had leased and the company that owns the aircraft has terminated their lease agreement with Zoom," Paton said.
The registration documents were to be surrendered to Transport Canada.
When the plane landed, the fuel supplier also told the airline it wouldn't refuel the aircraft because of outstanding debt.
** Cover for this airline under IPP's policies was withdrawn for this airline on 2nd June 2008
28 August 2008
China Eastern loss
News reports state that China Eastern Airlines posted a net loss of CNY212.5 million ($31 million) in the 2008 first half, narrowed from a CNY305.6 million deficit in the prior-year period, on a 6.6% lift in operating revenue to CNY20.31 billion.
Operating expenses jumped 10.52% to CNY21.94 billion, triggered by a 22.8% surge in fuel expenses to CNY8.57 billion. A currency exchange gain of CNY1.95 billion, more than double that reported in the year-ago semester, helped offset "declining domestic market demand" and high fuel prices that still impacted the result significantly.
Passenger traffic grew 0.2% year-over-year to 26.56 billion RPKs on a 0.6% increase in capacity to 37.35 billion ASKs, producing a load factor of 71.1%, down 0.3 point. Passenger boardings decreased 1.2% to 18.1 million.
28 August 2008
Air China's operating loss
News reports state that Air China's first-half net income fell 20.7% to CNY1.24 billion ($180.8 million) on surging oil prices and softening traffic resulting from May's Sichuan earthquake and heightened security surrounding the recently completed Olympics.
The company reported an operating loss of CNY336 million, a significant reversal from the CNY1.37 billion earned in the year-ago semester. The carrier remained in the black thanks to currency gains of CNY1.92 billion as the stronger yuan reduced the value of its US dollar-dominated debt.
First-half operating revenue rose 9.8% year-over-year to CNY25.65 billion while expenses jumped 18.2% to CNY25.98 billion as fuel costs increased 31.9% to CNY10.61 billion. Passenger boardings declined 1.5% to 17.6 million and load factor fell 0.8 point to 75.1%.
25 August 2008
Air Fiji in turbulence
News reports state that AIR Fiji grounded most of its aircraft on Saturday leaving many weekend travellers stranded in airports in Nadi.
And the company itself appears to have disappeared as our attempts all day yesterday to get a comment remained unanswered.
A passenger who spoke to Fiji Daily Post on condition of anonymity said the airline was making matters worse by not answering to its customers’ concerns.
“Even under normal circumstances, it takes time for their phones to answer our querries,” he said.
The airline’s operations centre on Saturday said attributed the ground of its aircraft to some technical problems and there was assurance that services would resume by tomorrow.
The company has been plagued recently by the skyrocketing price of fuel and problems relating to a 15 per cent pay cut for its workers.
22 August 2008
** AiRUnion - financial problems impact operations
News reports state that Russian airline alliance AiRUnion is facing significant financial troubles and having trouble paying its bills, to the point where aircraft at Moscow Domodedovo, which controls fuel distribution, are not being fueled on time.
"There are some open bills," a source close to the carrier confirmed, adding that discussions about the future of the five-carrier alliance are intensifying between the Russian government and AiRUnion CEO Boris Abramovich and President Alexander Abramovich. "The company is transforming from an old to a new system, and the old system can no longer exist," the source said. More news is expected next week.
AiRUnion comprises KrasAir, Domodedovo Airlines, Samara Airlines, Omskavia and Sibaviatrans. Just a few months ago it was planning to operate under one AOC and join Star Alliance. The Abramovich brothers own AiRUnion's largest constituent, KrasAir, which the source confirmed is carrying significant debt. Russian media have reported that AiRUnion is up to €675 million ($995.4 million) in debt.
Yesterday at DME, several thousand passengers experienced hours of delays while AiRUnion aircraft waited to be refueled. The Russian government finally agreed to supply 3,600 tons of kerosene.
Operating a fleet largely composed of Russian-built aircraft along with several Boeing types, AiRUnion is Russia's third-largest carrier and transported 3.7 million passengers in 2007. It signed an MOU last year to develop a strategic partnership with Lufthansa.
** In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
21 August 2008
IATA's Bisignani: 'We are in the perfect storm'
News reports state that "We are a fragile industry and we are in crisis; wait and see is no longer an option," was yesterday's assessment from IATA DG and CEO Giovanni Bisignani, who was addressing the Australian National Aviation Press Club in Sydney.
He claimed that despite the recent reduction in oil prices, commercial aviation remains in need of assistance. "We are in the perfect storm of uncontrollable fuel costs and falling demand. Airlines could lose as much as $6.1 billion this year. Already 25 airlines in our financial system have gone bust--greater than immediately following 9/11--and we are bracing for more," he told the gathering.
Bisignani warned that June cargo carriage dropped 0.8% year-over-year while passenger growth slowed to 3.8%, or half of last year's figure of 7.4%. He warned that the "unstable geopolitical system in Russia and the Middle East could easily send oil prices skyrocketing again."
He lauded the industry for its $5.6 billion profit in 2007, the first after six years of losses that topped a combined $40 billion. He said airlines have worked hard to reduce sales and marketing costs by 25%, improve fuel efficiency 19% and drop nonfuel unit costs 18%. But the result of all that work was a margin of only 1.1%.
He blasted governments for thinking "green" and seeing cash and not using the taxes to help the industry reduce emissions. He cited the UK's Air Passenger Duty that collected £2 billion ($3.72 billion) last year, a sum slightly more than aviation's climate change costs. "The government now plans to change the name and collect even more--£3.6 billion by 2012. And none will go to helping the industry's emissions goals," he said.
20 August 2008
China Southern plunges to big first-half loss
News reports state that China Southern Airlines posted a net loss of CNY1.17 billion ($169.7 million) in the first six months of 2008, a significant reversal from the CNY62 million earned in the year-ago period.
Operating revenue climbed 9.1% year-over-year to CNY26.78 billion against a 14% increase in operating expenses to CNY28 billion. CZ cited "various unfavourable factors including the US subprime mortgage crisis, ballooning inflation, stringent [domestic] monetary policies and natural disasters" as causes for the slower-than-expected market demand that impacted its results.
Domestic traffic grew 6.8% to 33.72 billion RPKs on a 5.1% increase in capacity to 44.9 billion ASKs, producing a load factor of 75.1%, up 1.2 points. Hong Kong and Macau traffic dipped 7.9% to 548 million RPKS on a 6.9% fall in capacity to 888 million ASKs. Load factor slipped 0.7 point to 61.7%. International traffic climbed 10.8% to 6.23 billion RPKs on an 8.5% lift in capacity to 9.65 billion ASKs, raising load factor 1.3 points to 64.6%. Passenger boardings increased 5.7% to 28 million and cargo volume rose 6.2% to 428,000 tonnes.
Looking ahead, CZ Chairman Liu Shao Yong expects the carrier "to undergo a long period of hardship" owing to the combined burdens of "insufficient market demand, fierce competition and high oil prices."
19 August 2008
Mesa Air Group loss
News reports state that Low-cost airline Mesa Air Group Inc. said it swung to a third-quarter net loss of $3.6 million, or 14 cents as share, from a profit of $2.6 million, or 8 cents a share, in the year-earlier quarter. Excluding one-time items, the carrier posted an adjusted loss of 9 cents a share compared to an adjusted profit of 21 cents a share in the year-ago period. Operating revenue climbed 5% to $351 million. The load factor, a measure of how full an airline's planes are, fell to 77% from 80%.
15 August 2008
El Al second quarter loss
News reports state that El Al recorded a second-quarter net loss of $11.2 million, reversed from a $16.6 million profit in the year-ago period, as rising fuel costs mitigated record revenue. "During the second quarter, El Al faced the challenge of the international crisis in aviation," President Haim Romano said. "Fuel prices continued to soar, by about 80% [year-over-year] . . . During the quarter, the fuel component represented close to 40% of flight expenses and resulted in a significant growth in company expenditure." He added that the Israeli flag carrier faces "ever increasing completion. . . characterized by the increase in seating capacity offered by foreign carriers."
Operating revenue climbed 23% to $557 million, its highest-ever second-quarter total. It credited a 26% lift in passenger revenue "as well as other revenue increases such as duty-free sales and from providing maintenance services to outside companies." Operating loss was $17.7 million, reversed from a $27.1 million operating profit in the year-ago period.
15 August 2008
SAS sinks to heavy second-quarter loss
News reports state that SAS Group reported a SEK411 million second-quarter loss, reversed from a SEK607 million profit in the year-ago period, and announced enhancements to its Profit 2008 recovery program featuring an additional SEK400 million in savings and the grounding of seven more aircraft.
"The reasons for the decrease in earnings are well known," President and CEO Mats Jansson said. "Managing this highly challenging situation is currently the primary focus of the SAS Group and the entire air travel industry."
15 August 2008
Korean posts $278 million loss
News reports stat that Korean Air reported a second-quarter loss of KRW288.9 billion ($278 million), widened from a KRW214.4 loss in the year-ago quarter, as costs escalated faster than rising revenue.
"Fuel expenses showed a sharp increase of 80.4% triggered by a soaring fuel price and a weakening Korean won," KE said, adding that a "weaker economic backdrop" slowed traffic growth, particularly in the international passenger sector.
Operating revenue rose 17.5% to KRW2.48 trillion including flat domestic growth, a 16.5% international passenger lift and a 28.4% boost in the cargo sector. Operating expenses, however, jumped 27.6% to KRW2.6 trillion, producing an operating loss of KRW116.4 billion, reversed from an operating profit of KRW75.4 billion in the year-ago quarter.
14 August 2008
Gol Airlines loss
News reports state that Gol blames fuel costs, VRG consolidation for big second-quarter loss
Gol and VRG parent Gol Linhas Aereas Inteligentes reported a second-quarter net loss of BRL171.7 million ($106.4 million), widened from a BRL35.4 million loss in the year-ago quarter, as it consolidated Gol and VRG's flight networks during the three-month period and contended with rising fuel costs.
14 August 2008
Thai Airways financial Loss
News reports state that Thai Airways posted a THB9.25 billion ($272.3 million) loss in the second quarter, widened from a THB430 million deficit in the year-ago period, on fuel costs and foreign exchange losses, according to a company statement cited by Reuters.
8 August 2008
JAL posts first-quarter loss
News reporst state that Japan Airlines Group posted a net loss for its fiscal first quarter ended June 30 of ¥3.4 billion ($31.3 million), narrowed from a ¥4.3 billion deficit in the prior-year period, and unveiled the biggest review of its network since 2002 to mitigate the rising cost of fuel.
The earnings result, while an improvement year-over-year, marked JAL's fifth consecutive first-quarter loss. It said that from Oct. 1 it will make major network changes, lifting capacity on high-growth, profitable flights such as those between Japan and Seoul, Shanghai and Hanoi. But it will suspend services on at least three underperforming international routes including Osaka-London Heathrow.
It also will downsize aircraft on a number of international routes and operate fewer frequencies on 12 domestic routes. It will cut five domestic routes altogether. JAL said it will make alterations to its cargo network including suspending routes and lowering frequencies where it believes revenue is waning.
The airline already has been undergoing something of a restructuring and the narrowed first-quarter loss was partly attributable to slashed jobs, reduced bonuses and lower retirement benefits.
7 August 2008
LOT Polish Airlines warns of cash crisis
News reports state that LOT Polish Airlines said this week that it will need to restructure as quickly as possible to avoid a cash crisis.
LOT has gone through five CEOs in the last five years under changing Polish governments, hindering its ability to make long-term strategic decisions over the period. "It is a wonder that this company still exists," a carrier executive told this website.
The government controls 68% of LOT and wants to float its stake in early 2009. CEO Dariusz Nowak has said the restructuring is aimed at returning the airline to an operating profit by the end of 2010. A plan is expected to be unveiled officially by the end of this month and is likely to include cutting costs and unprofitable routes.
6 August 2008
Chinese carriers look for new financing as market deteriorates
News reports state that Chinese carriers are struggling with the financial strain imposed by declining domestic demand and surging fuel costs and have turned to new financing in an effort to reduce the burden.
In order to replenish working capital and alleviate debt, Hainan Airlines announced it will circulate CNY2.7 billion ($393.5 million) in corporate bonds while China Southern Airlines plans to circulate CNY8 billion worth of commercial paper and CNY1.5 billion in medium-term notes to increase cash flow. Air China was approved to circulate an additional 400 million A shares that will be worth CNY4 billion based on the current share price. It noted that it will take CNY1.5 billion as working capital while the rest will fund its acquisition of 15 787s, 24 A320s and 15 737s.
Industry analysts have pointed out that airlines can overcome short-term financial difficulties through these initiatives but that they will do little to sustain their long-term growth unless the domestic market recovers.
5 August 2008
Royal Jordanian reports net loss
News reports state that Royal Jordanian reported a net loss of "around" JOD3.1 million ($4.4 million) in the first half of 2008, widened from a deficit of JOD1.9 million in the year-ago semester. It said the result was "much better than the losses estimated in the budget. . .despite the soaring jet fuel prices that the company had to pay for this year." Operating revenue rose 33% year-on-year to JOD315 million on a 21% increase in passengers to 1.2 million. RJ credited its "efforts to market sales, improve product and offer distinguished onboard services" for the increase. Load factor gained 5 points to 71%.
Operating expenses increased 37% to JOD316 million owing mainly to the jump in jet fuel costs, which soared 91% to JOD131 million. Fuel now comprises 42% of operating costs, up 12 points from the year-ago period. RJ is 30% hedged for 2008 and 2009. Cargo volume grew 21% and freight revenue rose 23.5% to JOD21 million. The carrier serves 55 destinations with a fleet of 27 aircraft.
5 August 2008
Asiana swings to quarterly loss
News reports state that Asiana Airlines suffered a KRW19.2 billion ($18.9 million) loss in the second quarter, reversed from a KRW38 billion profit in the year-ago period as rising fuel costs proved decisive.
Gross revenue rose 20.8% year-over-year to KRW1.04 trillion but operating expenses climbed 30.2% to KRW919.8 billion. Operating income fell to a KRW17.9 billion loss from a KRW20.6 billion profit in the second quarter of 2007.
1 August 2008
AirTran Holdings reports second quarter results
News reports state that AirTran Holdings reported a net loss of USD13.5 million or USD0.12 per diluted share for the second quarter. During the same quarter in 2007, AirTran reported net income of USD42.1 million or USD 0.42 per diluted share.
1 August 2008
BA Chief warns "airlines will go bust"
News reports state that more airlines will go bankrupt this year as rising fuel costs and weak consumer confidence ravage the industry, the chief executive of British Airways warned today.
Willie Walsh said carriers that struggled to make a profit during the recent sales boom will not survive the "worst ever" trading environment the industry has seen. The downturn has put 25 airlines out of business this year, including Luton-based business carrier Silverjet.
"You are going to see more airlines go bust. If you look around there are a lot of airlines out there that have not been profitable in the past few years. Those guys will not survive," he said.
Walsh added that fares will rise by an average of around 3% for the rest of the financial year, as BA passes on higher fuel costs to ever fewer passengers. Fares are expected to increase towards the end of the year as airlines' fuel hedges, where carriers buy their fuel in advance at a fixed cost that is often cheaper than the current market price, come to a close.
"As hedging unwinds within the industry, airlines are going to have to reflect the higher oil price. We will have to do something and it's not just BA that will have to adjust prices. The whole industry will have to. We are not reflecting the spot price [of oil] today. What is reflected in our fares is the oil price net of hedging." Higher fuel surcharges are also an option, but BA has already increased those significantly this year.
Walsh said BA is now planning for an oil price of up to $150 (£76) per barrel - a level at which no carrier in the world can make a profit currently. The BA chief executive, who announced an 88% dive in first quarter profits today due to high oil prices, said the re-fashioned BA will have more fuel-efficient aircraft, better customer service and be focused on long-haul business class customers.
"We are honest and realistic about this in a way that a lot of airlines are not. We have asked ourselves the question of what does the industry look like at $150 per barrel and what do we do to be one of the airlines that succeeds in that environment. We don't just want to hang in there."
Walsh did not rule out further capacity cuts next summer, adding that BA will fly its older long-haul planes less often next year in order to cut fuel bill that now stands at £8m per day. "We are not talking about grounding aircraft but the average utilisation will come down slightly."
30 July 2008
AirTran sinks to $13.5 million second-quarter loss
News reports state that AirTran Airways parent AirTran Holdings reported a net loss of $13.5 million for the second quarter, reversed from a profit of $42.1 million in the year-ago period, saying the "loss is primarily attributable to the effects of record high fuel costs."
28 July 2008
** Trade Winds Airlines files for Chapter 11
News reports state that TradeWinds Airlines announced Monday that it has filed for Chapter 11 bankruptcy protection, citing "a perfect storm" of adverse market conditions and what it called failed financial commitments.
Based on events leading up to filing Friday in the Southern District of Florida, the case could become even more stormy.
It involves an airline that has a long and troubled history in the Triad, including two earlier flights into bankruptcy.
In a statement Monday, the Gate City-based cargo aviation company said it had been beset by high fuel costs, decreased business, increased competition and a shortage of working capital.
The company said it will continue to operate during the court reorganization, adding that it would consider a sale or "an internal restructuring which will result in a smaller but sounder business."
Court filings indicate TradeWinds has assets of between $1 million and $10 million, liabilities of between $10 million and $50 million and more than 430 creditors.
Earlier this year, the company had about 200 employees, leased five 747s, owned six A-300s and flew routes within the U.S., and to Asia, South America, Europe, the Caribbean and China.
Scott L. Baena, a Miami lawyer representing the company, said TradeWinds went through a restructuring in February that involved refinancing of its existing debt.
At that time, Birmingham, Ala., businessman, Donald V. Watkins, acquired 77 percent of TradeWinds.
** In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
25 July 2008
Aerocalifornia services suspended
News reports state that Aerocalifornia was suspended again by the Ministry of transport and communicatios of Mexico on 23 July 2008 because of unpayed debts the airline has with airports with a sum of USD$25,900,000. The ministry said they will allow the airline to fly again when the money is paid.
23 July 2008
JetBlue loses $7 million, cancels 2008-09 growth
News reports state that Jet Blue Airways unveiled plans to cancel growth plans and defer aircraft deliveries as it announced a second-quarter net loss of $7 million, reversed from a $21 million profit in the year-ago period.
CEO Dave Barger said the LCC enjoyed "strong unit revenue growth" during the quarter and that summer bookings showed "continued strength," but that like its US counterparts it is facing an environment in which "revenue gains are clearly not keeping pace with the extraordinary increase in the price of jet fuel."
17 July 2008
Report Predicts Airline Bankruptcies, Liquidation in 2009
News reports state that a report released Tuesday by Fitch Ratings on the country's top airlines states that numerous layoffs, grounded flights and price increases, in addition to various cost-cutting measures, may not be enough to aid the struggling airline industry from the escalating effects of high oil prices, CNN reports. The report warns that record fuel costs, as well as meager cash flow, may instigate "multiple bankruptcies and liquidation" for major U.S. airlines in 2009 and that recent economic changes by carriers "are not sufficient to counter the devastating impact of jet fuel prices."
The report was released about a year after many major U.S airline companies– such as United Airlines, Delta Air Lines and Northwest Airlines– rose out of bankruptcy protection (as recently as June 2007), and warns that the current situation may be more crippling than the industry's previous financial crisis.
Recent bankruptcies in the industry have remained limited to small carriers such as Aloha Airlines, ATA and Skybus. Yet the report warns that, come the usual drop in air travel in the fall, larger airlines may begin to experience the same tragedy, especially as a sustained economic slump continues to drive more passengers away.
"After Labor Day ... all the U.S. legacy carriers will see a rapid erosion of cash levels that could threaten their survival in 2009 if adverse fuel trends continue," wrote William Warlick, a senior director at Fitch and author of the report.
12 July 2008
Airline stocks in tailspin over new record-high oil price
News reports state that a new record high for benchmark oil prices sent airline shares spiraling downward. At last check, the Amex Airline Index had shed 3.4% to 14.31 points with all of its 14 components trading down. Crude for August delivery was up $4.85 to $146.50 a barrel on the New York Mercantile Exchange. Earlier it rallied to an all-time high of $146.90 a barrel in electronic trading on Globex. Network carriers were plunging.
2 July 2008
FlyYeti to suspend operations
News reports state that FlyYeti.com, the low-cost joint venture between Air Arabia and Yeti Airlines operating out of Kathmandu, will suspend operations on July 16 owing to what it called "difficult operating conditions in Nepal and a presently opaque regulatory environment" and political conditions that made it impossible to guarantee the renewal of aircraft operating leases that expire this month.
30 June 2008
Fed Court race to decide airline's future
News reports state that the immediate future of Cairns-based independent airline Aero Tropics is teetering on the outcome of a race to the Federal Court after its operations were grounded for safety reasons on Friday.
Company plans to have its operating license reinstated today will not go ahead after Civil Aviation Safety Authority (CASA) spokesperson Peter Gibson confirmed a Federal Court application to extend the suspension for up to 40 days will not be lodged until later this week.
30 June 2008
East Star faces 'financial crisis,' loses route authority
News reports state that struggling Wuhan-based East Star Airlines, which claimed it is in "financial crisis," last week was dealt a further blow by CAAC, which decided to suspend its right to fly to Guangzhou and Shenzhen from July 7.
This makes the second time ESA has faced such a sanction. Flights to Shanghai were suspended by the regulator last month owing to the airline's inability to submit its "air transport funds" to CAAC in time.
An ESA insider recently was quoted in Chinese media claiming the airline might cease operations this month because of its "financial burden." It owed approximately CNY100 million ($14.6 million) to China Aviation Oil Import and Export Co., the main domestic oil supplier to Chinese carriers. Following those reports, the oil company agreed to postpone ESA's payment by one month to June 28.
ESA spokesperson Pan Yanli admitted the airline faces "some severe difficulties," including financial problems and a talent shortage. "We do suffer from financial strain but we are trying our best to solve it," she said, adding that "going listed in order to collect funds" is a possible solution.
25 June 2008
Jet Airways swings to full-year, fourth-quarter losses
News reports state that a significant swing to the red in its fiscal fourth quarter ended March 31 helped drag India's Jet Airways to a full-year loss of INR2.53 billion ($58.9 million), a reversal from the INR280 million profit it reported in the year ended March 31, 2007, and its JetLite subsidiary suffered even heavier losses.
"Over the past few months, the aviation industry worldwide has been facing the effects of continuing increases in crude oil prices," Jet said. "The situation in India is further exacerbated by continuing overcapacity as well as the fact that the operating costs in the Indian environment have always been higher than other comparable countries."
21 June 2008
Sudan Airways grounded
News reporst state that Sudan is to ground its national airline, Sudan Airways from 23rd June, stating that the airline does not meet international standards.
"This decision will come into force on Monday for an undefined period and will include both domestic and international flights," said the official from the Sudanese Civil Aviation Authority.
The Sudanese CAA Director of Safety said Sudan Airways had failed to take measures requested by the Civil Aviation Authority in May of this year.
17 June 2008
Increased first quarter losses for America's seven largest airlines
News Reports state that America's seven largest airlines reported a combined first-quarter loss of $1.32 billion, according data released Monday by The U.S. Bureau of Transportation Statistics
16 June 2008
Mexico Government Suspends Airline Magnicharters
News reports state that Mexico's Communications and Transport Ministry suspended budget airline Magnicharters Tuesday, saying the carrier was unable to guarantee passenger safety.
The ministry said in a statement that the airline has 90 days to correct the problems detected, in which case it could then resume operations.
The suspension went into effect at 5 p.m. local time (6 p.m. EDT).
The ministry said routine inspections by civil aviation authorities turned up anomalies in maintenance and training of staff.
The company was also found to be in a difficult financial situation, which limits its possibilities of maintaining a healthy and sustainable operation, the ministry added.
13 June 2008
Rescue deal collapses for British airline Silverjet
News reports state that a takeover deal to rescue small British business-class airline Silverjet has collapsed, resulting in the loss of 300 jobs, administrators said Friday.
Kingplace, an Ireland-based company managed by Heritage Cie SA, a Geneva-based investment firm, had agreed Wednesday to buy Silverjet for an undisclosed price.
"We now understand that, as a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern," administrators Begbies Traynor said in a statement on Friday, when the Swiss deal was due to complete.
"As a consequence, we have today had to make the entire workforce formally redundant, in line with our legal obligations as administrator."
The failed airline's 300 employees were made redundant earlier Friday, according to a spokesman for the administrator.
Silverjet was grounded in May after it failed to secure fresh financing from United Arab Emirates investment fund Viceroy Holdings.
11 June 2008
Kingplace Agrees to Buy Silverjet Airline From Administrators
News reports state that Kingplace Ltd., a company managed by Swiss trust Heritage Cie SA, has agreed to buy Silverjet Plc out of administration and restart the airline.
The sale was for an undisclosed sum and is expected to be completed by June 13, administrators Nigel Atkinson and Mark Fry of Begbies Traynor, and Silverjet, said in an e-mailed statement today.
All tickets will be honored and flights may be resumed within ``weeks,'' Ian Ilsley, chairman of Heritage and a director of Kingplace, said in the statement.
* Cover for this airline will still remain excluded until the sale has fully completed and we have completed a full re-evaluation of this airline
11 June 2008
Oil costs will push some Asian airlines under: analysts
News reports state that Record-high oil prices have sparked the biggest crisis in the Asian airline industry since the SARS scare, and analysts say some carriers are likely to go under if prices do not let up soon.
They say many of the region's airlines are ill-prepared to cope with the price surge, which saw oil top 139 dollars per barrel last week amid wide expectation prices will only keep rising in the months ahead.
"No one is going to escape this crisis unscathed," said Derek Sabudin, an analyst from the Sydney-based Centre for Asia Pacific Aviation consultancy.
He said airlines face a "severe shakeout" if extremely high fuel prices continue, with the industry already coping with the fallout from a US-led global economic slowdown.
"Carriers will be exiting the market," Sabudin said. "The weaker ones will go, and stronger carriers will shrink in size, if we see prices where they are above 120 dollars beyond the summer peak."
Shukor Yusof, an aviation analyst with Standard and Poor's Equity Research, said most carriers had not factored in prices at such "stratospheric" levels -- and that they were now not moving quickly enough in response.
"Few Asian airlines are reacting, in our view, adequately and aggressively enough to the oil shock and the devastation soon to follow," Shukor said.
If prices continue rising and hit 150 dollars a barrel or even higher, he said, "expect to see a rash of Asian carriers grounded and go bust."
4 June 2008
Icelandair increased loss
News reports state that Icelandair reported a ISK1.7 billion ($22.6 million) loss in the "normally negative" first quarter, deepened from a ISK1.2 billion loss in the first three months of 2007.
2 June 2008
ZOOM
As from 2nd June 2008 cover for ZOOM Airlines will be excluded for policies issued on or after this date
30 May 2008
** ALMOST 10,000 PASSENGERS HIT BY SILVERJET GROUNDING
New reports state that almost 10,000 passengers have been affected by Silverjet ceasing operations this morning.
The Civil Aviation Authority estimates that 7,000 UK and 2,500 overseas passengers have bookings with the business class carrier.
The CAA today issued advice to passengers due to fly with the airline to Newark or Dubai.
** Cover for this airline was excluded for all policies and tickets issued on and after 23rd May 2008
30 May 2008
SilverJet stops operations as of 30th May 2008
News reports state that SilverJet halted operations, a week after it had said it had yet to get a $5 million loan from a Middle East investment group. Silverjet said it continues to be in discussions with investors interested in supporting the business, however it has yet to conclude such discussions to its satisfaction. The last service of Silverjet was the flight from Dubai to London Luton, which departed at 7.30 a.m. BST Friday morning.
29 May 2008
El Al's first-quarter loss triples
News reports state that record revenue was not enough to offset a difficult economic environment and a one-time provision related to potential liability for anticompetitive cargo activities as El Al sank to a $49.9 million first-quarter loss that was more than three times the $15.3 million lost in the year-ago period.
27 May 2008
Club Air, Italian ENAC license suspended
News reports state that Club Air, Italian ENAC license has been suspended. Flights stopped as from May, 28th
(WAPA) - ENAC (Italian Civil Aviation Authority), has informed that as from next May, 28th, it will suspend all flights operated by Club Air, the Italian airline based in Verona which connects many national airports as Rome-Fiumicino, Milan-Malpensa, Verona, Catania, Foggia, Bari, Lamezia Terme, Cagliari and Palermo.
The decision, came after 2 respites (January, 31th and March, 31th 2008) and the temporary release of a license on July, 25th, 2007, has been motivated by ENAC with the missing discharge of the required engagements for the financial and operative reorganization of the airline.
ENAC communicated that "There're no necessary conditions to extend the airline's license because of the critical financial and management state of the company".
23 May 2008
SilverJet shares suspended after if did not received loan
News reports state that business class Airline SilverJet said Friday that it asked the London Stock Exchange to suspend trading in its shares after it didn't receive cash it had tried to draw down under a loan facility. The group said its Silverjet Aviation arm served notice to draw down $5 million under a loan facility with Viceroy Holdings on May 2, but hasn't received the money. "Silverjet's working capital reserves are limited and advances under the loan facility are required as a matter of urgency," the company said. "Silverjet continues discussions with other parties, which have confirmed an interest in investing in the company," it added. In the meantime, the company's service are continuing to run as scheduled.
* Under the terms of IPP's Insurance cover is now excluded for this airline with immediate effect
22 May 2008
Warning of oil crunch, oil soars to new record prices
News reports state that Oil prices surged $5 to a record over $134 a barrel on Wednesday after a U.S. government report showed a surprise drop in crude stockpiles, reinvigorating fears of a supply crunch.
21 May 2008
Martinair suffered a €68.9 million ($107.2 million) loss in 2007
News reports state that Martinair suffered a €68.9 million ($107.2 million) loss in 2007, a steep fall from its €7 million deficit in 2006 on level revenue of €951 million, as operating loss deepened to €71 million from €5 million.
The Dutch carrier said one-off costs associated with the renewal of its cargo fleet and the discontinuation of European passenger flights last year, along with a provision set aside to deal with the multinational investigation into airfreight price fixing, "brought considerable pressure to bear upon results."
21 May 2008
Aegean Airlines' net loss widened to €4.4 million
News reports state that Aegean Airlines' net loss widened to €4.4 million ($6.8 million) in the first quarter, traditionally its weakest period, from €2.6 million in the year-ago quarter.
Revenue climbed 23% to €98.8 million on the back of international network expansion and a 6% rise in sectors flown. Fuel costs jumped 57% to €24.4 million and operating loss plunged to €6 million from €2.6 million.
"Aegean continued to expand its business during Q1, amid challenging conditions for the airline sector created by the rise of oil prices to unprecedented levels," MD Dimitris Gerogiannis commented. "We are encouraged by the continuing positive maturing of international destinations initiated within the last two years as well as from the results of our revenue management efforts."
16 May 2008
Vueling Airlines posted a pre-tax loss
News reports state that Vueling Airlines posted a pre-tax loss of €32.4 million ($50.1 million) for the first quarter, a 47.1% increase over a €22 million pre-tax loss in the year-ago period.
15 May 2008
Mesa Air shutting down Air Midwest early
News reports state that struggling Mesa Air Group is accelerating the shutdown of its Air Midwest subsidiary, announcing Wednesday that the carrier serving rural communities will suspend all flights by June 30.
The Phoenix-based company, which is short on cash from a legal judgment and losses in its operations, cited high fuel prices and low demand for the flights. In Arizona, the affected cities are Prescott and Kingman, where service will end May 31 instead of August as previously announced.
Air Midwest, operating there as US Airways Express, serves Phoenix and Las Vegas from those cities.
15 May 2008
Struggling Alitalia reports €214.8 million first-quarter loss
News reports state that Alitalia reported a first-quarter pre-tax loss of €214.8 million ($333.1 million), 41% higher than the €152 million pre-tax loss in the year-ago period, citing higher fuel costs and lower traffic revenue as the main culprits.
15 May 2008
Iberia swings to first-quarter net loss on high fuel costs
News reports state that Iberia Group said it its first-quarter results were "dulled" by sharp hikes in the price of fuel, resulting in a net loss of €441,000 ($684,000), reversed from a profit of €12.3 million in the year-ago period.
13 May 2008
Far Eastern Airlines Suspends Operation
News reports state that having run out of operating fund, Far Eastern Air Transport has announced suspending its operation starting today (May 12).
To settle the ensuing problems, the airlines will continue maintaining limited flight services today, thanks to fuel oil lent by CPC Corp. Taiwan, an arrangement made following a marathon emergent coordination meeting convened by Civil Aeronautics Administration, under the Ministry of Transportation and Communications.
The company will operate nine flights today, including three for the Taipei-Matsu route and nine international flights, the latter of which mainly for transporting their 2,000 overseas passengers back to Taiwan.
Large number of sold plane tickets will become invalid, amounting to 56,800 domestic-flight tickets and 22,200 international-flight tickets, totaling NT$173 million in value, as of the end of April.
The suspension of operation of the airline has sent a shockwave among travel agencies and its creditor banks, including Bank of Taiwan, Mega Bank, and King`s Town Bank, and Far Eastern Bank. The banking loans topped NT$4.1 billion. Mega Bank reported that it owned priority claim for its loans for the airlines and would dispose of the latter`s properties to settle the debt. Far Eastern Bank, the largest creditor bank with NT$980 million of debt claim, pointed out that it might abandon its previous application with the court to serve as the executor for the restructuring of the airlines, since the suspension of operation will lead to loss of fund and personnel, making it impossible to carry out the restructuring program. The airline is thus facing the fate of liquidation.
12 May 2008
Austrian Airlines Group reports steep first quarter loss
News reports state that Austrian Airlines Group CEO Alfred Oetsch, under significant pressure following a steep first-quarter loss and the potential loss of a critical new investor (ATWOnline, May 7), told Austria's ORF radio last week that a shift from the airline's "standalone" strategy has become a possibility and that it now will consider partnering with a foreign carrier. "If no signs of improvement in the financial situation are on the horizon, a solution could be to bring in a strategic partner carrier," he said.
9 May 2008
EuroManx stops flying
EuroMax Airlines website stated today "It is with great regret that EuroManx have announced today that the company is ceasing operations forthwith with no further flights being operated." News reports state that Euromanx went out of business blaming fuel prices and falling passenger numbers.
9 May 2008
Air Canada posts C$288 million loss
News reports state that Air Canada reported a first-quarter net loss of C$288 million ($287 million), a substantial increase over a C$34 million loss in the year-ago period, blaming high fuel costs and charges associated with ongoing inquiries into potential antitrust violations in its cargo division.
7 May 2008
ExpressJet Holdings reports first quarter loss
News reports state that ExpressJet Holdings, which flies for partners Continental Airlines and Delta Air Lines as well as its own branded operation, reported a $31.3 million first-quarter loss, reversed from a $10.2 million profit in the first three months of 2007
6 May 2008
Airline stocks fall sharly, price of oil hits all time record
News reports state that airline stocks fell sharply Monday as oil prices topped $120 a barrel for the first time.
The Amex Airline Index fell 2.8 percent to 23.59 in late morning trading. The broader market eased more modestly, with the Dow Jones industrial average down 0.6 percent to 12,979.63.
Oil prices hit their latest record amid concerns about overseas supply and a falling dollar. Light, sweet crude for June delivery rose to a new trading record of $120.21 a barrel on the New York Mercantile Exchange, then retreated to trade up $3.52 at $119.84.
Airline shares often move opposite oil prices because fuel represents many carriers' biggest expense.
5 May 2008
China Airlines, EVA Airways report big first-quarter losses
News reports state that Taiwanese carriers China Airlines and EVA Airways reported first-quarter losses of TWD2.97 billion ($97.4 million) and TWD2.29 billion respectively.
The airlines, which reported the results in filings with the Taiwan Stock Exchange cited by Bloomberg News, each blamed high fuel costs for the poor results.
4 May 2008
Sri Lanka's budget airline grounded
News reports state that Sri Lanka's state-run budget carrier has suspended operations indefinitely because of a lack of planes, an aviation official said Sunday.
The budget airline, Mihin Lanka, has been dogged with financial trouble since it began commercial operations last April.
2 May 2008
Pakistan International Airlines loss for 2007
News reports state that Pakistan International Airlines concluded an "exceptionally difficult" 2007, during which it was blacklisted by the European Union, with a PKR13.4 billion ($207.5 million) loss, widened slightly from the PKR12.76 billion loss suffered in 2006.
PIA said it "experienced a series of financial, operational and marketing problems" and that with its "brand severely dented, [it] lost market share as well as growth in business which made the situation still more difficult."
2 May 2008
Gol reports first quarter loss
News reports state that Gol reported a first-quarter net loss of BRL3.5 million ($2.1 million), reversed from a profit of BRL116.6 million in the year-ago period, as last year's acquisition of Varig and its subsequent integration with Gol weighed heavily and led to sinking load factors.
2 May 2008
Hawaaiian first quarter loss
News reports state that Hawaiian Airlines parent Hawaiian Holdings reported a $19.9 million loss in the first quarter, widened from an $11.9 million deficit in the year-ago period, but its prospects have brightened somewhat owing to events that have transpired since the quarter's conclusion.
30 April 2008
SAS suffers heavy first-quarter loss, announces capacity, job cuts
News reports state that fuel costs, overcapacity and falling yields hit SAS Group hard in the first quarter, resulting in a SEK1.13 billion ($189.5 million) loss that represented a massive deterioration from the SEK47 million deficit reported in the year-ago quarter.
29 April 2008
Nationwide Airlines ceases all flights due to critical cash flow
Nationwide Airlines announced today that they have ceased all flight operations due to critical cash flow following grounding of their aircraft earlier in the year and 30% increased in fuel costs.
28 April 2008
Austrian Airlines Group suffers loss in the first quarter
News reports state that Austrian Airlines Group suffered a €60.4 million ($95.3 million) loss in the first quarter, widened from a €16.3 million deficit in the year-ago period, which prompted the company to say it expected a fall in full-year adjusted EBIT "due to the time-lagged effect of measures implemented through adjustment of fares and surcharges." Despite the "continued deterioriation in market conditions," OS has not given up on expansion.
27 April 2008
Eos Airlines Files For Bankruptcy
News reports state that Premium class New York to London carrier Eos Airlines on Saturday said it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The company said it could not close on an investment that would have carried it to corporate profitability in 2009.
The petition was filed April 26 in the U.S. Bankruptcy Court in the Southern District of New York. Eos will immediately reduce its workforce, eliminating most of its positions. The carrier will cease operations entirely after April 27.
According to Jack Williams, Eos' CEO, "After overcoming today's extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action. We had been clear since closing on our last round of financing that we would need additional capital…Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome."
* In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
25 April 2008
AirTran posts a 1st quarter loss
News reports state that AirTran Holdings Inc, the parent company of AirTran Airways Inc, reported a net loss of USD34.8 million for the first quarter. During the same quarter in 2007, AirTran reported net income of USD2.2 million. AirTran stated this quarter's loss is attributable to the effects of record high fuel costs.
25 April 2008
Norwegian posts large loss
News reports state that Norwegian posted a consolidated net loss of NOK210.8 million ($42.4 million) in the first quarter, a sharp deterioration from the NOK14.9 million loss suffered in the year-ago period, owing to increased seasonality, introduction of new aircraft, the integration and expansion of the old FlyNordic and the launch of 13 routes from its new base at Rygge.
18 April 2008
Sterling improving but still in the red
News reports state that Sterling improving but still in the red
Sterling Airlines managed to reduce its full-year net loss drastically to DKK34 million ($7.2 million) in 2007, narrowed from the DKK166 million deficit it posted in the prior year.
Revenue decreased 0.8% to DKK3.89 million as average fare fell 5.2% to DKK805. Ancillary revenue per passenger, however, increased 55.4% to DKK101.
18 April 2008
Southwest suffers steep first-quarter profit drop
News reports state that Southwest suffers steep first-quarter profit drop
A plunge in first-quarter profit to $34 million from the $93 million earned in the first three months of 2006 revealed both the strength of Southwest Airlines' business model and the weakness of the environment in which it now operates, as even the US's most consistently profitable airline is struggling with soaring fuel costs.
18 April 2008
Continental reports first-quarter loss
News reports state that Continental reports first-quarter loss, redeems golden share, considers leaving SkyTeam
Friday April 18, 2008
Continental Airlines reported a first-quarter net loss of $80 million, reversed from a $22 million profit in the year-ago period, and confirmed yesterday that it has redeemed Northwest Airlines' "golden share" that prevented CO from entering into merger agreements.
15 April 2008
Asian budget carriers face challenges after Oasis collapse
News reports state that soaring jet fuel prices, slowing economic growth and stiff competition could claim further casualties among Asian budget carriers following the collapse of Oasis Hong Kong Airlines last week, analysts said Monday.
The demise of Oasis just 18 months after it took to the skies shows that the shakeout in the industry is an international phenomenon and not a problem that's confined to the United States, where five airlines have recently shut down.
"We expect the negative and worsening macro environment for airlines to continue to take its toll in the form of forced capacity cuts (bankruptcies) and voluntary capacity cuts," said Morgan Stanley analyst William Greene.
"Consolidation remains the best path to improving the industry's volatile financials," he said in a note.
Oasis, one of the first budget airlines to focus on long-haul flights, collapsed last week, unable to cope with escalating jet fuel prices.
15 April 2008
Virgin blue shares plunge
News reports state that an AAP report today says that Virgin Blue Holdings Ltd shares have plunged to a record low after it forecast annual profit to halve amid rising fuel costs and tougher competition.
Toll Holdings Ltd, the airline's largest stakeholder, also took a beating as the transport giant said it too would be affected and it would not offload its holding in Virgin.
Virgin Blue shares closed down 21.62 per cent, or 24 cents, to 87 cents, hitting a record low of 86.5 cents during the day.
The airline's shares listed at $A2.25 ($NZ2.66) in December 2003.
Shares in Toll, which had been considering the sale of its Virgin stake, closed down $A1.43, or 15.08 percent, to $A8.05.
Australia's second largest airline warned, after the market closed on Friday, its net profit would be significantly lower than last financial year.
11 April 2008
Frontier Airlines files for Chapter 11 bankruptcy
News reports state that Frontier Airlines filed for Chapter 11 bankruptcy late Thursday in Manhattan.
Frontier blamed the action on an "unexpected attempt by its principal credit card processor to substantially increase a 'holdback' of customer receipts, which threatened to severely impact the airline's liquidity."
* In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
10 April 2008
** Swazi Express Airways close operations
News reports state that Managing Director Hans Steffan, addressing a press conference at the company premises here yesterday, said operations came to a halt on Friday. Steffan, 39, said he had invested over E10 million into the 12-year old company."Swazi Express Airways has ceased to operate due to unfair competition from the government," he said.
10 April 2008
More than 30,000 passengers hit by Oasis Airlines closure
News reports state that more than 30,000 passengers holding tickets valued at 300 million Hong Kong dollars (38.5 million US dollars) have been affected by the collapse of Hong Kong's first long-haul budget airline, Oasis, travel industry officials said Thursday.
The airline, which offered fares of as little as 1,000 Hong Kong dollars between London and Hong Kong, suspended all flights Wednesday after going into voluntary liquidation.
The shock news, just 18 months after the airline's launch, has left thousands of people with return tickets stranded in Hong Kong or the airline's two destinations of London and Vancouver.
Thousands more holding advance tickets have been left struggling to make alternative arrangements with no word about compensation or refunds.
9 April 2008
Oasis Hong Kong: Ceasing Airline Operations Immediately
News reports state that budget carrier Oasis Hong Kong Airlines Ltd. said Wednesday it had shut down its operations after being in service for just over 17 months.
Oasis said it had applied to Hong Kong's High Court to have its assets liquidated, and accounting firm KPMG had been appointed as provisional liquidators.
Flights were being canceled immediately, Oasis Chief Executive Stephen Miller told a news conference.
KPMG partner Edward Middleton told the news conference the liquidators were exploring the company's options.
Oasis, which offered one-way fares to London for as low as HK$1,000, had been operating four used Boeing 747-400 aircraft on flights to London and Vancouver.
The Hong Kong Economic Times reported Wednesday that Oasis had accumulated a loss of HK$1 billion since it was launched in October 2006. Oasis and KPMG didn't immediately address this issue in their news conference.
7 April 2008
Air Jamaica lost US$171 million in 2007
News reports state that AIR Jamaica lost a staggering US$171 million last year, its largest loss ever, according to an internal document shown to the Sunday Observer.
The loss came against revenues of US$413.3 million, an interest subsidy of US$44.71 million and a government grant of US$25.41 million, and continued a trend for the two previous years when the carrier bled heavily.
5 April 2008
Skybus folds
News reports state that Columbus-based airline blames high fuel prices, weak economy -- Surprised fliers find themselves stranded without notice -- 450 lose jobs; failure dims growth prospects for Port Columbus
Skybus Airlines has made its final flight.
Just over 10 months after its heralded takeoff at Port Columbus, the airline that became famous for its $10 fares said yesterday that it has quit flying as of today.
The decision, made after a board meeting yesterday, left hundreds of Skybus ticketholders stranded and its 450 employees out of work.
The company has lost millions of dollars and plans to file for Chapter 11 bankruptcy protection on Monday. Its chief executive, Bill Diffenderffer, resigned nearly two weeks ago.
Skybus workers were stunned by the news yesterday.
4 April 2008
ATA Airlines shuts down
News reports state that ATA Airlines, an independent carrier based in Indianapolis, shut down operations yesterday after filing for Chapter 11 bankruptcy protection Wednesday.
The airline, which began flying in 1973, blamed the shutdown on the loss of a military charter contract. ATA operated 29 aircraft, serving 10,000 passengers per day. Its 2,230 employees were notified that their positions had been eliminated. It is the second US carrier to shut down this week--Aloha Airlines closed up shop on Monday (ATWOnline, April 1). A third, Bloomington, Minn.-based charter carrier Champion Air, announced that it will stop flying on May 31.
3 April 2008
Alitalia Pushed Closer to Bankruptcy as Air France Ends Talks
News reports state that Alitalia SpA, which loses more than $1.6 million a day, moved closer to bankruptcy after Air France- KLM Group broke off takeover talks, scuttling a 15-month effort by Italy to find a buyer for the airline.
Air France ended the talks three hours before a midnight deadline, rejecting counter proposals by Alitalia's unions in Rome that the carrier said were ``incompatible'' with its offer. Italian Finance Minister Tommaso Padoa-Schioppa said yesterday Alitalia likely would have to seek protection from creditors if the Air France bid failed.
3 April 2008
Alitalia cover excluded
Effective immediately, cover is withdrawn for Alitalia following the withdrawal of the Air France KLM Group’s takeover bid.
As per the terms of the policy a “Threat of Insolvency” has occurred and we are no longer able to insure this airline.
Should the situation change we will, of course, advise you immediately.
31 March 2008
Aloha Airlines Halting Passenger Service
News reports state that Aloha Airlines said Sunday it will halt all passenger service after Monday, signaling the end of an airline that has served Hawaii for more than 60 years.
Aloha, which filed for bankruptcy for Chapter 11 bankruptcy protection on March 20, was a casualty of fierce competition and rising fuel prices. The airline said it will stop taking reservations for flights after Monday.
"We simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," said Aloha President David Banmiller in a statement. "We had no choice but to take this action."
28 March 2008
Air Macau posts loss
News reports state that Air Macau posted a 2007 loss of 109 million patacas (US$13.6 million), an increase of 76 percent on the 62 million patacas loss posted in 2006.
In 2005 Air Macau posted a loss of 20 million patacas.
Air Macau’s shareholders are China National Aviation Corporation (51 percent) – which is part of the holding company managed by Air China – and SEAP - Serviços, Administração e Participações, which includes TAP Portugal and Banco Nacional Ultramarino (20 percent), Sociedade de Turismo e Diversões de Macau (14 percent) and, 5 percente each for the Special Administrative Region of Macau and air carrier taiwan Eva Air and a group of small private investors.
According to Portuguese news agency Lusa, Zhao Xiaohang, chairman of the airline, explained Air Macau’s losses were partly due to the constant rise in the price of oil, but said that “throughout 2007 Air Macau did not make total use of the figure earmarked for purchasing fuel.”
27 March 2008
China Airlines record loss
News reports state that China Airlines Ltd, Taiwan's flag carrier, reported a record loss in 2007 net profit, dragged by the surging fuel price and the decreasing number of passengers.
Net loss was NTD 2.52 billion (US$83.7 million), or NTD 0.63 a share last year, compared with a net income of NTD 738.4 million, or NTD 0.19 apiece a year ago, said the company in a filing with the Taiwan Stock Exchange.
21 March 2008
Aloha Airlines Files for Bankruptcy
News reports state that Aloha Airlines filed for Chapter 11 bankruptcy protection Thursday, a little more than two years after emerging from bankruptcy.
Aloha said it will continue to fly as long as a bankruptcy court accepts the airline's financial plan to keep operating.
The airline said in its filing that it was unable to generate sufficient revenue due to what it called "predatory pricing" by Mesa Air Group Inc.'s go! airline.
Aloha Airgroup Inc. emerged from bankruptcy protection in February 2006, just 14 months after filing under Chapter 11.
Phoenix-based Mesa Air Group launched go! into the interisland market later in 2006 to compete with Aloha, as well as Hawaiian Airlines Inc.
In January, go! reported a $20 million operating loss in its first 16 months of operations. Meanwhile, Aloha and Hawaiian reported combined losses of nearly $65 million since go! began operating.
* In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline
19 March 2008
US Airline stocks hit all time low
News reporst state that Airline stocks fell sharply Monday, carrying the benchmark index to an all-time low on more economic uncertainty and widespread malaise in the financial industry
19 March 2008
Low cost Indonesian airline Adam Air to be shut down
News reports state that Indonesian low-cost carrier Adam Air will no longer be allowed to fly, Indonesian officials said.
17 March 2008
Indonesia threatens to close down Adam Air
News reports state that Indonesia threatened Monday to close low-cost carrier Adam Air after two of its largest shareholders announced plans to pull out of the beleaguered company.
The airline has defaulted on debt payments to airplane leasing companies, which has forced the company to ground 12 of its 22 planes, said Adam Suherman, whose family together with Sandra Ang owns a 50 percent stake.
Transportation Minister Jusman Djamal said the airline, which already has sliced its number of routes from 52 to 12 - has three weeks to prove it is economically viable.
If it cannot meet its financial obligations, he said, "its operating license will be revoked." No specific conditions were released to the media.
17 March 2008
Mihin Lanka flies into turbulance
News reporst state that eleven months after beginning operations, Mihin Lanka, a low cost Air Lines fully owned and funded by the Government of Sri Lanka (GOSL), is facing a loss of Rs.300 million, and if the economic performance does not improve soon, the airline may face bankruptcy, airline industry observers in Colombo said.
The trouble-plagued air lines was launched 24 April, 2007 to provide low cost flights to Sri lankans employed in Middle East countries, to passengers travelling to India, and also to be used by the Sri Lanka's President and his delegation during official trips abroad.
13 March 2008
Airlines losses $4-9 billion projected for 2008
News reports state Airlines have struggled due to rising oil prices, of late around $109 a barrel, and J.P. Morgan says “even a best-ever recessionary demand scenario results in a $4 billion industry loss. And if demand trends mirror prior recessions, a $9 billion loss can’t be ruled out. And in that scenario cash becomes scarce for many.”
7 March 2008
Crude oil record high price at $105.97 a barrel !
News reports state that crude-oil contracts for April delivery hit a record $105.97 a barrel on the New York Mercantile Exchange before easing back to finish the day at $105.47. Crude-oil prices are a barometer for jet fuel, airlines' single biggest operating expense.
6 March 2008
PAN AM grounded !
News reports state Pan Am has been grounded after the government revoked its flight certificate.
The airline has stopped its flights out of New Hampshire's Pease Air Terminal after the Transportation Department move. The agency is questioning Pan Am's financing, management practices and regard for the law and regulations governing service.
Boston-Maine Airways, which was the most recent airline to resurrect the Pan Am name, has filed an objection to the revocation, which became effective last Friday.
Pan Am also has suspended flights out of Bedford, Mass. and Trenton, N.J.
4 March 2008
SkyEurope first-quarter loss narrows
News reports state that SkyEurope posted a loss of €11.3 million ($17.2 million) in its fiscal first quarter ended Dec. 31, a 17.9% improvement on the €13.8 million deficit the LCC experienced in the year-ago period.
Operating loss, however, widened 21.8% to €14.8 million from €12.2 million a year earlier. Revenue grew 32.2% to €53 million on a 44.1% increase in passengers carried to 857,953. Total operating expenses rose 30% to €59.6 million.
27 February 2008
Vueling's full-year loss soars
News reports state that Vueling Airlines reported a sharp widening in full-year net loss to €63.2 million ($93.7 million), nearly six times worse than the €10.8 million loss posted in 2006, citing falling fares and record fuel costs as causes.
The Spanish LCC's average fare dropped more than 20% in 2007 to €37.65 owing to strong competitive pressure from "traditional and low-cost carriers alike," it said, noting that the negative impact on its bottom line amounted to €60 million.
Revenue rose 54.3% to €362.7 million on a 77% increase in passengers carried to 6.2 million. Load factor gained 3.7 points to 73%. Operating loss widened to €70.9 million from €10.3 million the previous year. CASK was up 4.5% to 5.75 euro cents but CASK excluding fuel improved 1.4% to 4.33 euro cents.
In the fourth quarter, Vueling reported a net loss of €30.9 million compared to a net loss of €9.4 million in the year-ago period. Operating loss increased to €32.5 million from €9.4 million. Despite canceling delivery of one new A320, the carrier grew its fleet to 20 aircraft that now operate on 50 routes. In 2006 it operated on average of 12.3 aircraft on 31 routes.
The LCC is formulating a strategic plan to address its financial situation and is expected to release details next month. It already has decided to discontinue several loss-making routes including Paris Charles de Gaulle to Milan Malpensa, Jerez and Seville and Madrid-Nice. It has stopped operating to Bologna and Pisa and will abandon Madrid to Amsterdam and Brussels at the end of March.
16 February 2008
Gol Has Loss
News reports state that Gol Linhas Aereas Inteligentes SA, Latin America's second-biggest airline by market value, posted a fourth-quarter loss after delays at Brazil's busiest airports reduced demand. The shares fell 5 percent.
The deficit was 24.2 million reais ($13.8 million) compared with a profit of 92.7 million reais a year earlier, Sao Paulo- based Gol said today in a statement on its Web site.
15 February 2008
PAL posts Q3 net loss of $11.3M
News reports state that Philippine Airlines, the country’s flag carrier, incurred a net loss of $11.3 million in its third quarter fiscal year compared to a net income of $79.5 million in the previous year’s comparative period, due primarily to the absence of one-time gains.
15 February 2008
Mesa Air Group $4.2 million loss first quarter
News reports state that Mesa Air Group, which provides regional lift for Delta Air Lines, United Airlines and US Airways and operates independently as Mesa Airlines and go!, reported a $4.2 million loss in the fiscal first quarter ended Dec. 31, reversed from an $8 million profit in the year-ago period.
12 February 2008
Big Sky Airlines
News reports state Big Sky Airlines parent MAIR Holdings reported a $15.2 million loss for the fiscal third quarter ended Dec. 31, widened from a $1.1 million deficit in the year-ago quarter, and confirmed Big Sky will cease operations in the western US on March 8. It ceased flying in the East last month (ATWOnline, Dec. 21, 2007). MAIR said it is "currently seeking to transition its remaining western operations to another carrier" and is "working to realize the maximum value of all its assets, including assessing the most tax-efficient mechanism to return cash to our shareholders." Third-quarter operating loss soared to $15.6 million from $2.4 million in the three months ended Dec. 31, 2006. Big Sky transported 61,464 passengers during the quarter, up 131% year-over-year, on 8,385 flights. Unit cost rose 39.2% to 45 cents. MAIR's nine-month net loss nearly doubled to $11.3 million from $6.2 million.
8 February 2008
Fuel debts said to ground several Cameroon Airlines aircraft
News reports state that African carrier Cameroon Airlines insists that it is still conducting flights although three of its aircraft are said to have been grounded over debts.
Speaking on behalf of Cameroon Airlines, a spokesman from the Cameroon High Commission in London, UK says the airline has been obliged to renegotiate agreements with its fuel suppliers, but that has now been done and flights are operating as normal.
The spokesman said the carrier does not have the ability to buy fuel on futures markets to hedge against price rises, and the rising cost of oil has put pressure on its finances, which caused the need to renegotiate fuel supply arrangements. He says this has been done satisfactorily, but has not provided details of the arrangements.
However, for the past 10 days, claims a local media report, three of Cameroon Airlines’ aircraft have been grounded in Douala owing to non-payment of fuel bills, causing significant disruption to the airline’s operations.
7 February 2008
Thai AirAsia posts a loss
News reporst state that Low-cost carrier Thai AirAsia posted a loss last year as it faced more intense competition and higher costs.
6 February 2008
SAS Shares Slump After Grounded Planes Prompt Loss
News reports state that SAS Group, owner of Scandinavian Airlines, fell the most in more than six years in Stockholm trading after plane groundings and strike threats led to a fourth-quarter loss.
SAS shares declined as much as 14 percent, the biggest drop since Sept. 12, 2001, and were down 8 kronor, or 13 percent, to 53.5 kronor at 4:35 p.m.
The airline owner had a net loss of 596 million kronor ($93 million), compared with a year-earlier profit of 4.61 billion kronor, Stockholm-based SAS said in a statement today. Analysts had predicted a profit of 101 million kronor.
6 February 2008
Tiger Airways flys into a loss
News reports state that TIGER Airways has posted a full-year loss of $S14 million ($A11 million) for its international operation, according to its most recent financial results.
1 February 2008
Koreans Air Lines - 4th Quarter losses
News reports states Korean Air Lines Co. said Thursday it lost money in the fourth quarter of 2007 due to high fuel prices and foreign exchange losses.
Korea Air, South Korea's largest airline, recorded a net loss of 34.8 billion won ($36.9 million; euro24.8 million) in the three months ended Dec. 31, compared to a net profit of 114 billion won a year earlier, the airline said in a statement.
31 January 2008
Travel misery after airline closure - City Star Airlines
Travel misery after airline closure
News reports state that Passengers are facing misery after an airline shut down following financial difficulties.
Aberdeen based City Star Airlines on Wednesday said it would cease operations from midnight.
The announcement came after one of the company's planes was impounded at Aberdeen Airport by BAA on Wednesday.
30 January 2008
3 More Airlines Cite Fuel Costs for Losses
News reports state that Northwest, JetBlue and AirTran Holdings — posted fourth-quarter losses on Tuesday as rising fuel costs erased gains from fare increases.
But the losses were narrower than expected for Northwest and JetBlue, and shares rose as a result.
Northwest said its deficit was $8 million after a $267 million loss in bankruptcy in the period a year earlier. JetBlue’s $4 million loss compared with net income of $17 million. AirTran pared its loss to $2.17 million from $3.55 million.
Fuel is “the principal culprit,” said David Swierenga, president of consulting firm AeroEcon in Round Rock, Tex. “The softening economy is clearly also having a negative effect.”
29 January 2008
Jet slides into red on high fuel prices, expansion costs
News reports state that Jet Airways, India's sole profitable major carrier, yesterday reported a INR911 million ($23.1 million) loss for the fiscal third quarter ended Dec. 31, reversed from a profit of INR400 million in the year-ago period, ending a streak of four consecutive positive quarters.
Jet cited "historical high fuel prices and startup losses on international business" as factors in the result. Three-month revenue rose 27.8% year-over-year to INR25.17 billion on an 8.7% increase in passengers to 2.95 million. Fuel costs jumped INR609 million from the year-ago period. "The increases in all other costs were in line with the increase in level of operation and in most instances, even lower than that of the same period last year," the company said. Traffic climbed 43% to 4.55 billion RPKs against a 43.2% rise in ASKs to 6.59 billion, lowering load factor 0.2 point to 69.1%. It added 10 aircraft during the quarter.
26 January 2008
Alaska Air Group Q4 Adj. Loss Widens
News reports state that Airline operator Alaska Air Group Inc. (ALK) Thursday announced results for the fourth quarter of fiscal 2007. Non-GAAP net loss for the quarter, excluding special items, widened from last year.
26 January 2008
Frontier Airlines reports net loss of $32.5 million
News reports state that Frontier Airlines Holdings Inc. late Thursday reported a third-quarter net loss of $32.5 million, or 89 cents a share, versus the 82-cent loss estimate of analysts polled by Thomson Financial.
The quarter ended Dec. 31 included charges totaling 9 cents a share, the company said.
In the comparable period last year, the Denver-based airline reported a net loss of $14.4 million, or 39 cents a share.
Revenue in the quarter rose to $333.9 million from $271.3 million.
Frontier said the primary drivers for its loss were the 16.3% year-over-year increase in fuel cost per gallon and losses from its regional fleet operation.
For 2009, the airline expects mainline capacity to grow roughly 4% to 6%.
Shares of Frontier closed the regular session at $2.97, and climbed 3.5% in after-hours trading.
23 January 2008
Norway's No. 4 airline, Coast Air, declares bankruptcy, immediately grounds all flights
News reports statte that Norway's No. 4 airline, Coast Air, declares bankruptcy, immediately grounds all flights.
, saying it had been stunned by unexpected and unsustainable fourth-quarter losses.
Coast Air was Norway's fourth-largest airline, after SAS Norway, Norwegian Air Shuttle and Wideroe. It had eight routes in Norway and two international connections, to Copenhagen, Denmark, and Gdansk, Poland.
«The bankruptcy is the result of a dramatic and unexpected increase in negative results for the fourth quarter,» said Trygve Seglem, a major shareholder. He did not disclose the extent of the losses.
He said the cost of operating the aircraft had increased dramatically, and that the airline had failed to reach a revised agreement with pilots that would have cut costs and increased crew flexibility.
The airline said about 400 passengers had been booked on flights Wednesday, and that their tickets were rendered invalid by the bankruptcy. Seglem said the company had no money left to offer them compensation or book them onto other airlines. Its staff of about 90 people was also immediately laid off.
The airline, based in the southwestern Norwegian city of Haugesund, was founded in 1975 and operated eight aircraft.
Seglem called the bankruptcy «a paradox,» saying strong growth in passengers and traffic was accompanied by a cost explosion that broke the company.
22 January 2008
SpiceJet net falls, says will post FY08 loss
News reports state that SpiceJet Ltd's quarterly profit fell to 93.4 million rupees on higher fuel prices and its chief said the budget airline would not meet a target of breaking even by the end of 2007/08.
For the quarter ending Dec 31, SpiceJet posted net profit of 93.4 million rupees, down from 121.6 million rupees a year ago. Net sales almost doubled to 4.09 billion rupees from 2.07 billion rupees in the previous year quarter.
Earlier, a top company official had said net profit fell 22.5 percent to 93 million rupees from 120 million rupees.
"We now expect to close the year with losses to the tune of 450-500 million rupees. We would have been better if we did not get a kick from oil prices," Executive Chairman Siddhanta Sharma told reporters after publishing the results.
In November, Sharma had said he expected the firm to break even by March, but added, he was concerned about rising oil prices.
Fuel prices made more than half of SpiceJet's total costs per available seat kilometer in the quarter, finance chief Partha Sarathi Basu said.
"Fuel prices are now inching towards 46 percent of our total costs... For 2008-09, we should be posting a small profit on the operational level," Sharma said.
22 January 2008
Shanghai Airlines predicts loss for 2007
News reports state that Shanghai Airlines predicted on Tuesday that it would post a loss for 2007, deteriorating from a net profit of 8.2 million yuan ($1.1 million) in 2006.
The airline posted a loss of 134.5 million yuan in the first half of last year, but said at the time that earnings were improving and a full-year profit was very likely.
Shanghai Airlines said on Tuesday that earnings were hit by high oil prices, while it had not yet managed to make its new international flights fully profitable, and the setting up of a cargo subsidiary drained money. It did not elaborate.
18 January 2008
** Air Mauritanie liquidated
News reports state that court orderes Air Mauritanie to liquidate assets following ongoing financial crisis.
The Mauritanian court ordered Air Mauritanie liquidate its assets following a financial crisis that has plagued the national air carrier for years, a judicial source said Friday.
14 January 2008
Mesa Air Swings to a Loss Amid Surging Fuel Prices
News reports state that Mesa Air Group Inc. swung to a net loss for the fiscal fourth quarter, as surging fuel prices and a charge related to litigation with Hawaiian Airlines weighed on the airline.
The Phoenix-based carrier posted a net loss of $68.2 million, or $2.37 a share, for the quarter ended Sept. 30, compared with $4.8 million, or 12 cents a share, a year earlier. Revenue for the quarter fell 6% to $327.8 million from $348.8 million, primarily resulting from a decrease in aircraft in service.
9 January 2008
Alitalia sees wider-than-expected loss
Alitalia expects an extra €200-million ($294-million) in loss this year because of the increased cost of fuel, the newspaper Il Sole 24 Ore reported on Wednesday.
The airline, which is likely to be acquired by French group Air France-KLM, had recently told Air France it expected a loss of €400-million in 2008, the report said.
Last year, Alitalia paid €1.013-billion or 21.0 percent of its income, for fuel.
In the first nine months of last year the airline ran up a pre-tax loss of €255-million.
9 January 2008
Frontier Airlines loss
News reports state that Frontier Airlines will report a pre-tax loss for the fourth quarter of 2007, President and CEO Sean Menke said. A $0.78-$0.88 per share loss excluding special items, larger than forecast, was caused by "higher-than-expected operating expenses" related to winter weather in Denver and the Midwest late last month and "weaker-than-expected performance in some sun destination markets," he said.
26 December 2007
Big Sky Shuts Down Nationwide Operations
News reports state that the airline announced they are ceasing operations nationwide.
The Montana-based airline said they could not make a profit. A spokesperson for the company said that Big Sky is not bankrupt and that all shareholders will be paid. The airline plans to liquidate its assets as quickly as possible.
Airport officials at Burlington International Airport say they're confident that another airline will take Big Sky's place offering non-stop flights to Boston.
"Quite frankly, the service hadn't been particularly good," said Brian Searles of Burlington International Airport. "We're in touch with Delta now to find out what kind of service will be provided after the Big Sky contract is up and we feel it will likely be an improvement."
Big Sky service to the Northeast ends Jan. 7, 2008. The airline will also shut down its operations in five western states.
25 December 2007
Maxjet Airways files for bankruptcy protection
News reports state that Maxjet Airways threw itself onto bankruptcy protection Monday as soaring costs, stiff competition and a deteriorating credit market scuttled the fledgling airline's bid to carve out a niche for itself by catering exclusively to business-class passengers in the trans-Atlantic market. "It is with deep regret that I must inform you that Maxjet filed Chapter 11 bankruptcy ... With today's fuel prices and the resulting impact on the credit climate for airlines, we are forced to take this drastic measure," Maxjet President and CEO William Stockbridge said in a statement posted on the company's Web site. Maxjet's bankruptcy came as no surprise in the airline industry. Mounting financial problems forced the suspension of its shares on Dec. 7, six months after the Dulles, Va.-based company debuted in London. Maxjet's maiden flight took off two years ago, aimed exclusively at budget-minded business travelers on the New York-to-London run. The airline promised amenities that business travelers had come to expect but were getting increasingly hard to find, especially after the demise of the legendary Concorde flights operated by British Airways. Maxjet's fleet of five aircraft used Stansted airport outside London as the hub for a tight network of flights to New York's JFK, Los Angeles and Las Vegas. The venture met with plenty of analyst skepticism from the start, amid warnings that the carrier offered too few flights to too few destinations to compete for lucrative corporate accounts. Pricing pressure from established carriers such as British Airways, Air France-KLM and Virgin also made it hard for the newcomer to break into the field while a slowdown in corporate as well as consumer spending was seen as a major factor making it hard for Maxjet to line up any more credit.
22 December 2007
FlyWhoosh grounded
News reports state that troubled airine flyWhoosh finally admitted yesterday that its Dundee services have been grounded for good.
The belated announcement came after the Polish company which provided the plane and crew, White Eagle Aviation, ended its business relationship with flyWhoosh two weeks ago, leaving it with no aircraft.
Bizarrely though, the company has blamed its demise on what it terms “negative publicity” by The Courier, in an Email to customers who have lost their flights and, possibly, their money.
21 December 2007
Big Sky bails on East Coast operations, braces for shutdown
News reports state that Big Sky Airlines, a subsidiary of MAIR Holdings, will shutter its US East Coast operations as a Delta Connection partner on Jan. 7.
MAIR plans to sell seven Big Sky Beech 1900s and will attempt to offload its operating certificate as well, President Paul Foley said. Big Sky has been operating the 19-seat turboprops under codeshare with DL since April.
"Big Sky is going to be shut down at some point," Big Sky President Fred deLeeuw told ATWOnline. He said he expects it to happen in 60-90 days. "Our eastern operations were dramatically affected by a combination of unusually bad weather, disappointing revenue and record-high fuel prices," he explained. Foley said yesterday that Big Sky lost $1.3 million in November and "we do not see future conditions improving to the level required."
This is the second round of bad news this year at MAIR. In January it turned over its bankrupt regional subsidiary Mesaba Airlines to codeshare partner Northwest Airlines as part of a stock purchase and reorganization agreement
20 December 2007
Nationwide is still battling headwinds
News reports state that Nationwide Airlines, still recovering after its temporary grounding last month, says it has been struggling to accommodate passengers who, in turn, say they have lost faith in the airline.
The Civil Aviation Authority (CAA) grounded the airline on November 30 when it suspended its approval of the airline's aircraft maintenance organisation and the certificates of airworthiness of its fleet of aircraft.
About two weeks ago the CAA ruled that Nationwide's aircraft could again take to the skies.
Rodger Whittle, Nationwide's corporate quality director, said it had been taking strain this festive season.
"We are operating with far fewer aircraft than normal. This has obviously had huge implications ... we have been inundated with calls from our clients and we can't accommodate them," he said.
Two Nationwide flights to Johannesburg were cancelled on Wednesday for as yet unestablished reasons.
20 December 2007
Skybus Airlines losses
News reports state that Skybus Airlines lost $16 million in the third quarter, according to statistics the startup LCC provided to the US Dept. of Transportation and cited by several press reports. Revenue was $22 million as the carrier achieved a 79% load factor. Yield was just 5.08 cents. The Ohio-based airline told media that the results were "in line" with expectations.
19 December 2007
AlpiEagles: creditors have petitioned in bankruptcy
News reports state that SAVE, GESAC, AZ and the "Il Sole 24 Ore" the main creditors
The lawyers of AlpiEagles creditors have petitioned in in bankruptcy.
The main creditors of the airline, led by Paolo Sinigallia, that have petitioned to the Venice Court, are SAVE, Venice Airport Management Company, GESAC, Napoli-Capodichino Management Company, Alitalia and unofficial sources report also the name of "Il Sole 24 Ore" newspaper and in that regard it has not yet released any statements.
The global amount requested by the first two companies is about 6 million Euro (over 4 million Euro for SAVE) relating to the use of the airports, while the debt on Alitalia is 300,000 Euro and about 100,000 for the Italian newspaper.
On December 18th there was the first hearing, but all has been postponed to February 12th, 2008.
The licence of AlpiEagles will expire on December 31st, 2007, but the hearing is delayed to next February. Will ENAC, Italian Civil Aviation Authority, suspend the airline's activity or allow it to extend its licence still further?
19 December 2007
Virgin America sees loss after takeoff
News reports statet that Virgin America Inc., the Burlingame startup airline partly owned by U.K. billionaire Richard Branson, lost $34.8 million in its first quarter of operation, according to U.S. government data.
19 December 2007
Aloha Airlines
News reports state that Aloha Airlines yesterday confirmed press reports of a $15.1 million loss in the third quarter, widened from a $9.9 million deficit in the year-ago period. The carrier now has suffered a loss in each of the past 16 quarters, the Honolulu Star-Bulletin calculated. Third-quarter revenue rose 4.6% to $104.4 million, but higher fuel prices and lower fares continued to plague Aloha, according to President and CEO David Banmiller. Expenses climbed 5.1% to $116.1 million and operating loss deepened to $11.7 million from $10.6 million in the third quarter of 2006. The airline, which emerged from bankruptcy in February 2006, lost $58.1 million through the first nine months. It lost $41.5 million last year.
16 December 2007
Mesa expects fiscal 2007 loss
News reports state that Mesa Air Group Inc., the parent of interisland carrier go!, said today it expects to report a loss for the fiscal year that ended in September.
The earnings release will be delayed pending a review of “certain estimates,” Phoenix-based Mesa said in a filing with the Securities and Exchange Commission. The airline fired Chief Financial Officer George “Peter” Murnane last month and named William Hoke as interim CFO after a probe into possible misconduct.
14 December 2007
Airlines face 33% profit loss
News reports state that the airline industry predicts profits next year will be cut by one third as soaring fuel costs and the credit crunch begin to take their toll.
The International Air Transport Association (IATA) forecast yesterday that the global aviation business would make profits of $US5 billion ($A5.7 billion) in 2008, compared with a previous forecast of $US7.8 billion.
The greatest burden on airlines next year will be fuel prices, with the spike in charges set to add $US14 billion to the industry fuel bill, bringing it to $US149 billion, based on an average price of $US78 per barrel.
The impact of the credit crunch is also expected to lead to slower growth in revenue and traffic. The delivery of new, bigger aircraft will make the problem worse, with more seats competing for fewer passengers.
13 December 2007
O'Connor Airlines will cease operating
News reports state that O'Connor Airlines is about to be grounded because there has been no interest in buying it as a going concern.
The troubled regional operator O'Connor Airlines will cease operating tomorrow night.
The administrator has announced that, despite significant initial interest, there were no offers to acquire the South Australian-based airline as a going concern.
It says that continuing trading losses, declining support from customers, flight crew shortages and significant aircraft maintenance issues have contributed to the decision.
Passengers affected by the imminent closure are being contacted by O'Connor Airlines staff.
13 December 2007
Airline Shares Tumble
News reports state that Airline shares extended early losses Tuesday after the Federal Reserve cut the benchmark federal funds rate by a quarter percentage point to 4.25 percent, in line with what most economists expected.
The federal funds rate is the rate commercial banks charge one another on overnight loans.
Broader markets dipped shortly after the announcement as investors appeared to want bolder action from the central bank. Airline stocks tumbled further, pressured by rising crude oil prices and a downbeat earnings outlook that weighed on the sector earlier in the session.
13 December 2007
Fuel costs put airlines back into the red
News reports state that an analyst says higher jet fuel prices will lead to first industrywide loss since early 2006, although reduced profits could return in '08.
After almost two years of profits, the airline industry will hit turbulence and post a fourth quarter loss due to high jet fuel prices, according to a leading analyst.
Ray Neidl of Calyon Securities cut his earnings forecast on most major airlines. He said fuel costs have averaged $2.55 a gallon so far in the fourth quarter, up 16 percent from a $2.20 average in the third quarter.
11 December 2007
Nationwide 24-hour-strike to paralyse transport across Greece
News reports state that all flights are expected be grounded, ships to be docked and urban transport and public services are expected to grind to a halt across Greece when labour unions Wednesday stage a 24-hour-strike to protest proposed pension reforms.
No flights would be leaving or arriving at Athens International Airport as air-traffic controllers decided to join the action Tuesday.
State-operated Olympic Airlines joined the strike after the government said it was unlikely that it could rescue the airline from bankruptcy.
11 December 2007
Frontier Airlines
News reports state that Frontier Airlines said it expects a pre-tax loss of $0.58-$0.68 per share excluding special items in the third fiscal quarter ending Dec. 31. It did not offer a comparison to the year-ago quarter, when it reported a net loss of $14.4 million. It also said it planned to reduce year-over-year mainline capacity growth for the fiscal fourth quarter to 8.6% from the originally scheduled 13.7%.
7 December 2007
MaxJet Suspends Share Trading
All-business-class airline Maxjet today suspended trading in its shares pending “clarification” of its financial position.
The airline started flying between Stansted and New York in November 2005, claiming to offer the amenitites of business class at fares comparable to economy class.
It lost £40 million in its first year of operation, but gained £47.3 million after floating on the Alternative Investment Market this year, aiming to use the cash to pay off debts and fund expansion.
Maxjet’s first-year losses, in the 12 months to the end of 2006, came on a turnover of £21 million.
At the time it insisted that it was normal for a new airline to lose money in its early years, and it expected to break even by launching more services.
7 December 2007
Kingfisher Airlines posts Rs 577 cr loss
News reports state that Kingfisher Airlines has posted a net loss of Rs 577 crore in the financial year ended March 2007, the balance sheet of UB Holdings, which owns the airline, shows. The loss was on a revenue of Rs 1,553 crore earned during the year. This, incidentally, may well be the biggest loss posted by a major domestic airline recently.
Kingfisher’s more established rival, full-service carrier Jet Airways, had recorded a marginal profit of Rs 28 crore in the same period while government-owned Indian closed the year with a Rs 275-crore loss. Industry analysts estimate that domestic airlines have lost around Rs 2,000 crore in 2006-07.
Kingfisher, now in its third year of operation, hopes to break even in 2008-09. But analysts reckon that the going could get tougher, especially if the current cost pressures continue even as the Vijay Mallya-owned airline attempts to chart its international foray next year.
“The high cost is the main reason for the loss,” said Kingfisher Airlines vice-chairman Subhash Gupte. “Aircraft acquisition, depreciation, new routes, training requirement and the spiralling cost of aviation fuel in India are the other reasons,” he said. Kingfisher’s failure to utilise aircraft capacity in full has also added to the woes.
Air Deccan has been in the red since its inception, having accumulated losses of around Rs 420 crore. Kingfisher Radio, another UB Group firm, had acquired 46% stake in Deccan Aviation this June. The prospects of an eventual merger between the two carriers is on the cards.
7 December 2007
Olympic Airlines to liquidate
News reports state that Olympic Airlines will be prepared for liquidation. Greek Minister of Transport Kostis Hadzidakis is planning the closure of the loss-making carrier next year and wants to replace it with a new airline under a new name and with a much smaller fleet. The Greek government also is looking for private investors, according to press reports. "We do not want a blueprint of Olympic, where the state has full control," Hadzidakis was quoted as saying.
According to preliminary plans, the new carrier would operate with a fleet of 20 aircraft instead of the current 42. Most international routes would be closed, with the network focused on flights to domestic destinations and neighboring countries. Half of the 8,500 positions at Olympic would be cut, with the government planning to offer early retirement packages or jobs in other state-owned enterprises. Last weekend, Hadzidakis said Olympic's debt had reached €2 billion ($2.94 billion) and that legal proceedings involving alleged illegal state aid to the struggling carrier have made finding investors impossible
4 December 2007
British holiday makers face misery as airline is grounded
The Daily Mail reported on Monday that hundreds of British holidaymakers have had their travel plans severely disrupted following the grounding of an international airline.
South African carrier Nationwide, which operates four return flights a week between Gatwick and Johannesburg, lost an engine on take-off on a recent flight from Cape Town.
Last week the South African Civil Aviation Authority suspended Nationwide's aviation maintenance organisation licence, leading to the suspension of all flights.
A spokesman for Gatwick airport said today that Nationwide's planned 7pm Gatwick-Johannesburg flight had been cancelled. The airline's other normal Gatwick departures are on Tuesdays, Thursdays and Saturdays have also been stopped.
The disruption will now mean misery for the hundreds of British holiday makers planning to travel to South Africa.
Yesterday South Africa's Civil Aviation Authority (SACAA) said Nationwide were attempting to solve the problems by leasing an aircraft from Dutch airmline KLM to fly passengers to London.
Earlier this month the SACAA said it took the decision to ground all Boeing 737 200 aircraft in the country yesterday for safety checks after an engine fell off the wing of a Nationwide Airline aircraft carrying 106 passengers in Cape Town. There were no injuries sustained by anyone on board or on the ground.
On its website yesterday, Nationwide said: "The Civil Aviation Authority is still investigating the cause of the incident, and the results of the investigation are not expected to be known for some time.
"It would appear however that during the take off roll an object which is yet to be defined was ingested into the engine which caused a catastrophic engine failure. The subsequent forces experienced by the engine supporting structure caused this to fail and for the number two engine to detach from the wing.
"Effectively, this grounded all Boeing 737-200 aircraft operated in South Africa until compliance with the Airworthiness Directive could be accomplished."
4 December 2007
IATA shuts Nationwide back-office
News reports state that the Geneva-based International Air Transport Association (IATA) has suspended Nationwide Airline from participation in its billing and settlement systems. The global industry association says the move follows confirmation on Nationwide's Web site on Friday that it had suspended operations.
4 December 2007
Olympic 'facing difficult future'
News reports state that the Greek government has said that national carrier Olympic Airlines has a 'more difficult future' amid speculation it may soon be grounded.
Athens is under increased pressure to reclaim illegal state aid that it paid to the airline.
And Ryanair is taking the European Commission to court for failing to act on further state subsidies it alleges were paid to Olympic.
The Greek carrier has struggled despite the widely-criticised funds.
Athens has previously said that the demands for repayments have made it impossible to find investors for the potential privatisation of the airline.
'Jobs safe'
The legal action by Ryanair makes Olympic's survival "more difficult" Greece's Transport Minister Costis Hadzidakis warned.
In a carefully worded statement following a meeting with EU Transport Commissioner Jacques Barrot over the weekend, he said that the government was committed to keeping Olympic in the air.
But if it was forced to close, he pledged that none of the estimated 8,500 workers at the flag carrier would lose their jobs and that none of the Greek islands would lose their air links to the mainland.
This has been widely interpreted that the troubled airline's days are numbered.
Financial woes
Olympic has faced financial difficulties for years, despite being propped up by Athens.
Efforts to privatise the carrier hit turbulence after a 2005 ruling by the European Commission that found the Greek government guilty of illegal state aid to Olympic and demanded it reclaim the money worth hundreds of millions of euros.
The ruling related to subsidies given to Olympic between 1998 and 2002.
Ryanair's complaint relates to a further 500m euros subsequently given by Greece to the airline, which the Irish budget airline alleges is the latest attempt by the government to support the carrier.
2 December 2007
SkyEurope preliminary FY net loss narrows to 24.1 mln eur on higher loadfactor
News reports state that SkyEurope Holding AG said preliminary net loss for the full year narrowed to 24.1 mln eur from over 57 mln a year before thanks to a record loadfactor in the fourth quarter.
The low-cost Slovakian airline reported preliminary EBITDAR (earnings before interest, tax, debt, amortisation and rent) at 9.6 mln eur for the year ending Sept 30 versus a negative 32.1 mln reported in 2006.
30 November 2007
Nationwide aircraft grounded indefinitely
News reports satet that Nationwide’s aircraft will remain grounded until the airline has fixed deficiencies within its maintenance section, the SA Civil Aviation Authority (CAA) said on Friday.
The CAA suspended approval for the airline’s aircraft maintenance organisation from midnight on Thursday, said CAA chief executive officer Zakes Myeza.
It had also suspended the certificates of airworthiness of Nationwide’s fleet of 16 aircraft - twelve 737 - 200s, five 727s and one 767.
If the airline did not comply, its licence would be revoked altogether.
“It was unavoidable,” said Myeza.
He said the suspension arose from the airline’s failure to comply with an airworthiness directorate issued in September and subsequent audits of its compliance.
29 November 2007
EU keeps ban on Indonesian airlines
News reports state that the EU on Wednesday lifted its entry ban on Pakistan International Airlines (PIA) and on Blue Wing Airlines of Surinam, but refused to do the same with Garuda and other Indonesian airlines because of ongoing safety concerns. A statement from the EU's Transport Commission said both PIA and Blue Wing Airlines had "successfully completed the implementation of a corrective action plan following their inclusion in (the EU's) list (of banned airlines)."
The EU added Indonesia's national airline, Garuda, and all other Indonesian airlines to its list of carriers that are not allowed to fly into EU territory in June.
While no Indonesian airline flew to EU member states before the crashes, the ban obliges travel agencies to warn customers that Indonesian airlines are unsafe if they sell package tours that use such carriers.
Last week, Indonesian President Susilo Bambang Yudhoyono urged the EU to act swiftly to lift the ban, saying Indonesia was making every effort to improve aviation safety.
But a Transport Commission spokesman said Wednesday that improvements were still needed.
"Clear progress is there, but more effort is still needed to make sure that all the deficiencies have been tackled and that we can lift our ban. That is not the case yet. We still need some improvements," said Michele Cercone, the spokesman for Transport Commissioner Jacques Barrot.
European Commission President Jose Manuel Barroso promised to send a team of experts back to Indonesia to speed up a review of airline safety in the country during his visit to Jakarta last week.
Wednesday's update of the EU blacklist, which takes place every three months, also acknowledged the efforts being made by the civil aviation authorities of Iran, Ukraine and Angola to improve safety.
However, TAAG Angola Airlines, Mahan Air and Ukrainian Mediterranean Airlines remain on the EU's blacklist, which covers eight individual airlines and all carriers from Equatorial Guinea, Indonesia, the Kyrgyz Republic, Liberia, Sierra Leone, Swaziland and the Democratic Republic of Congo.
Europe's civil aviation authorities carry out only random inspections of aircraft operating within the 27-member bloc. Therefore, the fact that an airline is not included in the EU blacklist does not automatically mean that it meets the applicable safety standards, officials note.
28 November 2007
Air India
News reports state that Air India board this week signed off on a loss of INR4.48 billion ($112.5 million) for the fiscal year ended March 31, a result reversed from a INR149.4 million profit in the prior year, according to widespread press reports from India. Revenue climbed 2.8% year-over-year to INR95.9 billion and the carrier struggled to fend off low-fare competition as its fuel bill rose a reported INR3.86 billion, or nearly 13%, and it was forced to pay INR4.25 billion in wage arrears. Dow Jones reported that Indian Airlines, which has merged with Air India under the National Aviation Co. of India Ltd. banner, reported a fiscal-year loss of INR2.75 billion following three straight years of profit, including a INR495 million surplus in 2005-06.
28 November 2007
Thai Airways suffers a 29.5% decline in profit
News reports state that Thai Airways suffered a 29.5% decline in profit in its fiscal year ended Sept. 30 to THB6.34 billion ($201.7 million), according to press reports from Bangkok that cited weak aircraft sales and unfavorable foreign currency fluctuations for the result. Sales climbed 7.5% to THB192.03 billion, but foreign currency gains plunged 80.6% to THB1.2 billion and the THB500 million earned from the sale of three aircraft compared to THB2 billion it made from disposal of four freighters in the 2005-06 fiscal year, Thomson Financial reported. Costs were up 5.3% to THB179.2 billion and passenger numbers rose 3% to approximately 20 million. Load factor was 77%.
26 November 2007
Indian may post Rs 250-crore loss
News reports state that the national carrier, Indian, the country’s second largest airline by marketshare, is expected to post a net loss of about Rs 250 crore for the financial year 2005-6, instead of a profit of Rs 48 crore.
The change is after the audit committee of the National Aviation Company (NACL) board asked the Indian management to provide for losses of Alliance Air worth about Rs 300 crore. The losses were not provided for earlier. Indian’s accounts for the last fiscal have hence not been finalised yet. Air India’s accounts on the other hand, were approved by the board and amount to a net loss of Rs 447.93 crore for the full year 2005-6.
Alliance Air, is the low cost subsidiary of Indian. The books of the two carriers will be merged from this fiscal as the merger comes into effect. The board meeting of NACL, the holding company, that began on Friday spilled over to Saturday on the issue of the finalisation of accounts.
On the NACL board are the Air India chairman V Thulasidas, financial advisor to the ministry of civil aviation Raghu Menon, joint secretary RK Singh, chairman of ICICI bank Mr N Vaghul who is an independent director and the NACL vice chairman V Trivedi, who is also the former chairman of Indian. The board also has six functional directors from the two carriers.
The former Air India director, who spoke to ET on Friday said, ``savings resulting from the merger between the two carriers will improve the financial health of the company this fiscal.”
Meanwhile, elaborating on the reasons for Air India’s losses, the company’s director public relations Jitender Bhargava said, ``higher fuel cost, increased interest liabilities because of new aircraft and lower revenues have resulted in the losses.’’
He also said almost every airline in the country was losing money. Air India’s fuel bill increased by Rs 386 crore to Rs 3,530 crore during 2006-7. The interest liability was up by Rs 239 crore during the period.
The revenues, however, fell to Rs 5,360 crore from Rs 5,689 crore in 2005-6. Air India’s Ebitdar (earnings before interest, tax, depreciation ammortisation and rent), an important parameter for the airline industry, amounted to Rs 798 crore.
22 November 2007
AIRLINES BRACE FOR FURTHER TURBULENCE
News reports state that as the price of oil surged towards USS100 per barrel in overnight trade, the aviation industry was bracing itself for further after-shocks.
In its daily media hotline, the Centre for Asia Pacific Aviation said the fallout of the US sub prime mortgage crisis and worries over the outlook for the US economy continued to rattle investors.
“In Asia, the impact has not been as great, as economic growth remains strong and US dollar weakness has cushioned the blow of rising fuel costs,” said CAPA.
Cathay Pacific CEO, Tony Tyler, stated that Asia's airlines still have pricing power in the current market, adding “that's how we can keep our heads up, despite the very high fuel costs”.
CAPA said fuel surcharges would continue to rise, particularly in less competitive, long-haul international markets.
"Much depends on the Chinese economy, Asia’s dominant market," said Peter Harbison, CAPA executive chairman. "If it were to stumble, the blowtorch could be quickly applied to Asia’s economies and its airlines."
21 November 2007
Deccan runs up accumulated losses
News reports state that Low cost airline, ‘Simplifly’ Deccan has run up accumulated losses worth about Rs 778 crore (as of June, 2007) but it is confident that it will return to profits as early as April-June 2008 quarter.
“Consolidation in the industry is setting in which means airlines will start achieving higher yields and realisation,” Deccan’s officiating Chief Executive Officer, Mr Ramki Sundaram, told Business Line.
The accumulated losses exclude the Rs 253.18-crore loss the airline suffered during the July-September quarter this year. If one takes into consideration the Rs 800-crore debt which the UB Group raised to buy 46 per cent stake in Deccan Aviation which runs Deccan, the owners of the airline have a lot to worry about. But airline officials claim that in another 18 months, accumulated losses will reduce considerably.
What worries the domestic airlines more, according to Mr Sundaram is the sharp increase in oil prices as well as poor airport infrastructure. “If the government stops cross-subsidising, and prices the ATF (aviation turbine fuel) on par with international prices, we will be able to manage our finances much better,” Mr Sundaram said.
21 November 2007
Shares in Austrian Airlines AG nosedive
News reports state that shares in Austrian Airlines AG nosedived in heavy volumes in mid-afternoon trading, as the carrier led a broad decline among European airline stocks on the back of rising oil prices.
At 2.26 pm, Austrian Airline shares were down 7.83 pct to 5.53 eur, while the ATX index was down 1.88 pct to 4,328.01.
Analysts attributed the carrier's strong share price loss to additional gains in the already high price of oil, as well as to the general weakness in trading on the Vienna bourse today.
On Friday, the airline said its October passenger traffic volume was up 0.2 pct year-on-year to 952,600 passengers, while its passenger load factor for the month was 76.4 pct, compared to 75.4 pct a year earlier.
21 November 2007
More turbulence in Brazil's airline industry
News reports state that there is more turbulence in Brazil's airline industry with the grounding of BRA, Brazil is left with two dominant groups: TAM and Gol/Varig
The suspension of flights at BRA, sharp profit falls at both Gol and TAM in the third quarter and the return to international duty of Varig, all in the past few weeks, illustrate perfectly the fluctuating fortunes of the Brazilian airline industry.
São Paulo-based BRA, which had built up a network of around 30 destinations in under two years, suspended all of its domestic and international operations in early November. Its fleet of seven Boeing 737s and two 767s were grounded as the carrier ran out of cash. Privately owned BRA says it is in negotiations to secure enough financing to resume operations. Prior to the suspension, it emerged that the airline's founder and chief executive, Humberto Folegatti, had resigned in October. He had just ordered 20 Embraer E-195s.
BRA's predicament was deepened by air traffic disruption in the country, partly caused by flight restrictions at São Paulo's Conganhas airport following the crash of a TAM Airbus A320 in July. This disruption was mainly behind Gol's profits in the third quarter plummeting by 75% and TAM's by over a third.
20 November 2007
Industrial problems in Jamaican airline
News reports state that the financially-strapped national airline, Air Jamaica, says it is seeking to reduce its workforce and has also proposed a 12-month voluntary leave of absence for workers.
Newly appointed executive chairman Shirley Williams has confirmed that the work force will be reduced and that the company is to carry out an audit of all departments to determine how it would carry out the planned staff reduction.
Williams said there is an urgent need to cut costs at the airline.
"As I said from the very first day that I assumed responsibility for Air Jamaica, we have to restructure the organisation so that it is efficient," she said.
"We have to do cuts in terms of human resources because in many areas they are currently overstaffed. We are auditing every department and whatever action is required to be taken in the interest of efficiency will be taken and will be taken in a timely manner," she added.
But the Bustamante Industrial Trade Union, (BITU), which represents the workers including pilots and flight attendants, has rejected the voluntary leave of absence proposal.
BTU president general, Kavon Gayle, said if the company pursues the plan it would have a negative impact on the airline's operations.
"It was proposed to us sometime earlier on this year and we raised the concerns about it as to how it would impact on the operations.
"What Air Jamaica needs to do is to make a forensic analysis on all facets of their operations and come up with a structured set of objectives and priorities in terms of how they can improve the operation and how they can reduce and save costs," Gayle said.
He said that a meeting would be held with the workers later this week.
Meanwhile, flight operations at the Norman Manley International Airport could be severely affected by as early as Tuesday afternoon after emergency and maintenance workers attached to the Airports Authority of Jamaica, (AAJ) have threatened to walk off the job if the management fails to present them with a new wage offer.
The workers are being represented by the Trade Union Congress (TUC), whose deputy general secretary, Barrington Dawes, said wage negotiations have been going on for nearly a year without much success.
He said the workers had rejected previous offers presented by the AAJ and ultimatums issued against the company have not had much effect.
"As a consequence we have urged the AAJ repeatedly to make meaningful offers. The response of the management is very slow in coming and we have reached a point where our patience has been completely exhausted and we have said the airports authority make some meaningful response."
He said failure to do so by midday on Tuesday could result in "a cessation of operations".
19 November 2007
Philippine Airlines suffered an $11.8 million loss
News reports state that Philippine Airlines suffered an $11.8 million loss in its fiscal second quarter ended Sept. 30, widened from a $6.2 million deficit in the year-ago period. PAL said the increase was due principally to higher maintenance and fuel expenses. Revenue rose 13% to $354.1 million as yields climbed, it said. Fuel accounted for $108.2 million of the $365.9 million in expenses. Despite the result, PAL reached the halfway point of its fiscal year a record $22.7 million in the black compared to a surplus of $10.9 million in the year-ago semester.
19 November 2007
AIRLINE STOCKS - Sector hit by broad market sell-off, climbing crude
News reports state that Airline stocks fell sharply Monday, clobbered by a big downdraft in the overall stock market, rising oil prices, and more gloomy comments about the state of the industry.
At the close, the Amex Airline Index (XALamex airline index XAL) was down 5.2% at 39.68 points, with some of the index's biggest carriers leading the decline.
US Airways Group Inc. (LCCUS Airways Group Inc LCC) posted the group's steepest percentage decline, down 8% to close at $20.61 a share. Northwest Airlines Corp. (NWAnorthwest airls corp com NWA) fell nearly 7% to $17.95.
Continental Airlines Inc. (CALContinental Airlines Inc CAL) ended at $27.82, down nearly a 6% from Friday's close, while American Airlines parent AMR Corp. (AMRAMR Corporation AMR) shed 4.9% to end the session at $21.38.
Much of the pressure came from a Goldman Sachs downgrade of Citigroup, citing the likelihood of more subprime mortgage losses, which gnawed away at investor confidence in the broad market and sent the Dow Jones Industrials into a 218-point tailspin.
But crude-oil's brief overnight surge to $95 a barrel was another unsettling factor. The front-month crude contract on the New York Mercantile Exchange finished the day with an 80-cent gain at $94.64.
Crude's gains stemmed from a decision over the weekend by the Organization of Petroleum Exporting Countries not to boost production quotas. Some of the group's members went so far as to say that oil prices appear undervalued given the weak U.S. dollar, the currency of the global oil market.
The comments gave little encouragement to airline fuel managers hoping crude prices would continue their retreat from near $100 a week ago, but instead seem to be settling in at the mid-$90s level.
16 November 2007
Save and Gesac petition in bankruptcy against Alpi Eagles
News reports state that the Alpi Eagles airline situation seems to be more and more difficult. The carrier of Veneto, long time is in the centre of enourmos problems , is faced with petition in bankruptcy, filed by SAVE and GESAC (the companies which manage the airport of Venice and Naples respectively) at the Court of Padova.
The news has been confirmed by union sources and the FIT, FILT and UILT national secretaryships have immediately asked for a confrontation with the minister of Transport Alessandro Bianchi. The future of Alpi Eagles concerns about 800 workers, 300 of which are employees of the carrier.
The debts towards the SAVE come to 3.8 million of Euros, sum not confirmed by Paolo Sinigaglia, the President of Alpi Eagles, who replies this way to the SAVE and GESAC petition: "Alpi Eagles is not in a state of insolvency, because it is super-capitalized. I want stigmatize SAVE action, made by its President Enrico Marchi, who long time plots to close our airline".
16 November 2007
Alitalia's third-quarter loss narrows but still heavy
News reports state that despite falling passenger traffic revenue and continuing labor unrest, Alitalia managed to narrow its third-quarter deficit.
Its pre-tax loss of €57.6 million ($84.3 million) was an improvement over the €66.4 million suffered in the year-ago period, while its operating loss narrowed to €19.1 million from €42 million in the third quarter of 2006.
A 4.6% decline in passenger revenue was offset by rising cargo and nontraffic income, producing a 1% climb in consolidated turnover to €1.27 billion. AZ said "industrial unrest" during the period resulted in a "potential" revenue loss of approximately €32 million. Costs fell 0.2% to €1.21 billion, which helped boost the operating result.
Operating a fleet of 185 aircraft at the close of the quarter, AZ reported a 0.1% increase in passenger traffic and a 0.3% rise in capacity, resulting in a 0.2 point slip in load factor to 78.6%. Yield fell 5.3% year-over-year owing to increasing LCC competition and unfavorable foreign exchange trends, and revenue per ASK declined 5.5%.
Nine-month pre-tax loss narrowed to €255 million from €274.8 million in the year-ago period as operating less fell to €146.4 million from €172.6 million. AZ said its full-year operating results "should be practically in line" with the €265.7 million deficit reported for 2006 prior to a readjustment necessitated by a writedown in the value of its fleet. It forecast a "moderate" increase in passengers and a "noticeable" fall in yield and said it will retain sufficient cash to continuing operating for more than 12 months.
* Despite the continuing negative profits IPP continue to maintain cover for this airline
14 November 2007
Alitalia says Q3 pre-tax net loss narrows
News reports state - Italy's national carrier Alitalia on Tuesday reported a third-quarter pre-tax loss of 58 million euros ($84.78 million), an improvement of almost 9 million euros on the same period last year.
Alitalia, still on the hunt for a buyer after a failed auction for the Italian government's controlling stake in the airline, said operating revenues rose by about 1 percent to 1.267 billion euros in the period.
9 November 2007
Italian minister says Alitalia risks bankruptcy if government sale fails
Press reports state that Italy's transport minister said Thursday that Alitalia SpA might have to file for bankruptcy in a few months if government attempts to sell a controlling stake in the Italian airline fail.
``If we're not able to sell Alitalia in an acceptable manner within the next two to three months, we'd run the serious risk of bankruptcy,'' Transport Minister Alessandro Bianchi said.
The Italian government has been struggling to sell its 49.9 percent stake in loss-making Alitalia. Its attempt earlier this year to sell at least a 39 percent stake failed after all potential buyers gradually pulled out, saying the conditions were too stringent.
Last month, Alitalia Chairman Maurizio Prato said he would sound out interest for the company's sale with six candidates, including Air France-KLM, Deutsche Lufthansa AG, the private Italian carrier Air One and Russia's Aeroflot.
No new terms have been indicated. But after the failed auction, analysts said it is likely that most of the conditions have been taken off the table in order to accelerate a sale.
Air One is Italy's second-biggest carrier by passenger numbers after Alitalia. The holding company that controls Air One on Wednesday said Goldman Sachs will act as adviser for a bid it is preparing with the support of Italian bank Intesa Sanpaolo.
Alitalia has been suffering under competition from low-cost carriers, high operating costs and damaging strikes. In the first half of the year, its net loss was ¤211 million (US$297 million).
* IPP still continue to offer cover for this airline
8 November 2007
Solomon Airlines suspends flights
News reports state that the Solomon Islands national airline has suspended all domestic flights with immediate effect.
The financially-troubled Solomon Airlines announced the suspension today. The move will disadvantage thousands of people who rely on its services to travel between the nation's scattered islands.
Airline officials could not be contacted for comment this evening in the capital, Honiara.
It was unclear if the airline's international flights to and from Brisbane would be affected.
The Solomons government, which owns the airline, has had to bail it out in the past.
8 November 2007
Creditors want AEXJet to liquidate
Press reports state that the two largest creditors of Aspen Executive Air filed a motion Monday asking the court to convert the airline’s bankruptcy from Chapter 11 to Chapter 7, meaning the Basalt-based airline would sell off all assets instead of reorganize its debts.
But John Gallaher, the CEO of Aspen Executive Air — better known as AEXJet — said Tuesday that he is confident the motion won’t be approved.
“We don’t think [the motion] is going to go through,” Gallaher said while he was at Denver International Airport en route to Delaware, where a hearing is scheduled Wednesday in U.S. Bankruptcy Court.
The motion comes after AEXJet filed for bankruptcy protection Sept. 14, and court papers filed last month state that the airline is $66.9 million in debt, including $30 million to two aircraft leasing companies — JLT Aircraft Holding Co. and Walker Aircraft.
The two Minnesota firms filed the motion arguing that because AEXJet “is apparently unable to pay its operating expenses, JLT and Walker believe that (AEXJet’s) continued presence in chapter 11 will only result in further losses to the bankruptcy estate.”
JLT and Walker also contend that AEXJet’s pending merger with Arkansas-based Pinnacle Airlines would increase AEXJet’s debt, and, in turn, “negatively impact creditors by decreasing their chances for recovery.”
7 November 2007
Brazilian airline BRA asks for temporary suspension amid financial problems
New reports state that Brazilian airline BRA announced Tuesday that it had asked for the temporary suspension of all its domestic and international fights because of financial problems.
In a statement, the carrier said it would await investments to eventually resume operations after asking the National Civil Aviation Agency (ANAC) to grant the suspension.
BRA denied the allegation that it had declared bankruptcy, while indicating that it would need approximately 30 million U.S. dollars to come back to business.
With a fleet of 10 aircraft, the company has 26 destinations in Brazil and three abroad. It operates 35 domestic and five international flights per week, representing 4.6 percent of the country's total.
BRA also advised passengers to contact the company to have their tickets refunded or transferred to other airlines.
The suspension will leave 1,100 workers jobless. The company said it had notified the employees of the decision.
7 November 2007
Goldman Sachs To Advise Air One In Alitalia Bid
New reports state - ROME -(Dow Jones)- The holding company of Italian airline Air One said Tuesday that Goldman Sachs (GS) will act as adviser for a bid it is preparing, with the support of Italian bank Intesa Sanpaolo (ISP.MI), for Alitalia SpA (AZA.MI).
In a statement, AP Holding said Nomura Holdings (NMR) and other investment banks would also take part in the deal to buy a controlling stake in Alitalia held by the Italian Treasury, without providing details.
The Italian government has this year been struggling to sell its 49.9% stake in loss-making Alitalia. A tender organized by the Treasury was scrapped in July after Air One, Italy's second-biggest carrier by passenger numbers after Alitalia and the last credible buyer left in the running, pulled out saying the sale terms didn't give it a free enough hand to implement a restructuring strategy.
* IPP continue to offer cover for this airline
7 November 2007
FRONTIER AIRLINES HOLDINGS
Press reports state that FRONTIER AIRLINES HOLDINGS, a lagging low-cost carrier in a troubled industry, has watched its stock sputter along for nearly two years. But after a stand-out September quarter and with a new chief executive in the pilot's seat, the airline could be in for a turnaround.
Frontier flies routes to 47 cities in the U.S. out of its Denver hub, as well as to seven cities in Mexico and two in Canada. The $258 million company has held its own against UAL's United Airlines for years, but ever since Southwest Airlines began flying out of the Mile High City, Frontier's stock has fallen 24%. Frontier has also lost money in three out of the past four quarters.
7 November 2007
Big Sky Airlines loss
News reports state that Big Sky Airlines parent MAIR Holdings reported a $2.5 million loss in the fiscal second quarter ended Sept. 30, unchanged from the year-ago period. Revenue climbed 46.4% to $9.05 million while expenses rose 29.9% to $12.5 million, resulting in a flat operating loss of $3.4 million. Big Sky, which serves 26 cities with 13 Beech 1900Ds as a Delta Connection partner and in codeshare with Northwest Airlines, Alaska Airlines, Horizon Air and US Air, flew 14.8 million RPMs during the quarter, up 63.5%. Capacity rose 28.8% to 28.5 million ASMs, lifting load factor 11 points to 52%. Fiscal first-half result swung to a $4 million profit from a $5 million deficit in the year-ago period.
6 November 2007
National Airline On Verge Of Bankruptcy
Press statements report that the government-run airline in the Marshall Islands is on the verge of bankruptcy as the country continues to suffer with no domestic air service.
Last week, the government injected $200,000 to the struggling airline, which has been going through payless paydays for lack of revenue.
5 November 2007
Air Deccan registers highest loss ever
Press reports state that Air Deccan registers highest loss ever, poorer by Rs253 cr in Q1. The performance signals continued financial challenges for a carrier attempting to reinvent itself after a buyout and a new chief executive took over at the helm of the airlineMehul SrivastavaCosts of an ongoing merger, a lean passenger season, and softening ticket yields have seen India’s biggest low-cost airline, Air Deccan, posting its largest ever quarterly net loss of Rs253.18 crore in July-September, its first quarter this year, nearly six times the loss in the year-ago period.
The performance signals continued financial challenges for a carrier attempting to reinvent itself after a buyout and a new chief executive took over at the helm of the airline.
The losses in the comparable period last year were just under Rs43 crore for the quarter ended September 2006, but the airline then had seen a one-time income from outside sources made on asset sales. In just this one quarter, the airline’s losses equal 55% of the company’s annual losses for the last financial year, which it ended on 30 June with about Rs419 crore in the red.
5 November 2007
Pakistan's major airline suffers disappointment
Press statements report that the head of Pakistan International Airlines (PIA)is puzzled, six months into the job, why the business isn’t turning around.
Losses since the start of 2006 exceed half a billion dollars and PIA chairman Zafar Ahmad Khan says he is 'confused and disappointed'.
The total loss is about 2.5 times the market capitalisation of the state-run company.
Mr Khan is now convinced the airline will need to come up with a new game plan and new techniques.
2 November 2007
Alitalia
News reports state Alitalia Group's net debt as of Sept. 30 was €1.71 billion, an increase of 6% from the prior month. The company repaid €13 million worth of medium/long-term financing in September.
Despite this report IPP continue to offer cover for this airline.
2 November 2007
SpiceJet
News reports state that SpiceJet reported a INR377.7 million ($9.6 million) loss in its fiscal second quarter ended Sept 30, widened from a INR319.1 million pro forma deficit in the year-ago period. The carrier changed its financial year to April-March from June-May, meaning it did not report official results for the July-September 2006 period. Second-quarter revenue rose 64.6% to INR2.7 billion and pre-tax loss widened to INR374.7 million from INR310.8 million. Six-month loss of INR192.3 million was an improvement from a INR355.9 million loss in the semester ended Sept. 30, 2006.
Despite these reports IPP continue to offer cover for this airline
1 October 2007
Vueling sees possible loss in 2007
News reports state that Spanish airline Vueling (VULG.MC: Quote, Profile, Research) said on Monday it could not meet its 2007 financial targets due to falling ticket prices and rising fuel costs, marking its second profit warning in three months.
The Barcelona-based airline said earnings before interest, tax, depreciation and aircraft rentals (EBITDAR) could fall to a loss of up to 10 million euros, compared with a previous forecast of a profit between 23 million and 42 million euros.
In a statement to the Spanish stock exchange regulator, Vueling said fuel prices, the euro-dollar exchange rate and the availability of slots at airports were among factors hitting results.
It said a 10 percent reduction in income from ticket prices per passenger could cut the company's full-year financial results by 30.4 million euros.
Vueling did not specify which line of the income statement it was referring to.
Spanish news agency Efe reported on Monday that Vueling could warn the market of expected losses of over 50 million euros this year.
Last year the airline lost 10.78 million euros but forecast moving into net profit in 2007.
In its statement on Monday, Vueling also said it was cancelling a tax credit it had booked in the first-half, knocking 21.9 million euros off its balance sheet.
Vueling shares were first rocked in June when founding shareholder Apax Partners sold its 21 percent stake, and fell further in August when it published deepening first-half losses and warned that core earnings would not hit the 95 million euros forecast last November.
Then last week the airline's chairman and two other directors, representing its largest shareholder Hemisferio, resigned after differences over the company's commercial strategy.
The stock has lost two-thirds of its value so far this year.
The company named Barbara Cassani, the founder of former British low-cost carrier Go, as chairwoman.
In an interview with Reuters, she said the airline had to move away from its reliance on Internet sales and she backed the strategy of Chief Executive Carlos Munoz to slow route expansion but increase the frequency on some routes to lure business flyers.
The bourse regulator suspended trade in its shares on Monday before the market opened while it waited for information from the company.
26 September 2007
Alitalia chairman tells parliament 'comatose' carrier
Alitalia Chairman Maurizio Prato testified before an Italian parliamentary committee yesterday that the troubled airline is in even worse shape than is generally acknowledged, a striking admission given the already wide acceptance of AZ's financial difficulties.
"Alitalia is in a comatose state, it's on life support and I am very surprised by the almost general state of denial," Prato told lawmakers, according to multiple news reports. He said the carrier likely will post a full-year loss of about €400 million ($564 million) and does not have the resources to make more than €320 million in debt payments due over the next two years.
Despite Alitalia's current uncertainty, IPP continue to offer cover for this airline
14 June 2007
** European Air Express to end operations as of September
News reports state that European Air Express is to end operations from 30th September 2007. It operated scheduled passenger services from and withing Germany.
31 May 2007
Northwest Airlines
Northwest Airlines has emerged from Chapter 11 bankruptcy protection with effect from 31 May 2007. In accordance with the terms of our policy, cover for Scheduled Airline Failure is now reinstated for this airline from this date.
All tickets issued during the period of Chapter 11 bankruptcy protection (14 September 2005 to 30 May 2007) will not be covered.
30 April 2007
Delta Airlines
Delta Airlines has emerged from Chapter 11 bankruptcy protection with effect from 30 April 2007. In accordance with the terms of our policy, cover for Scheduled Airline Failure is now reinstated for this airline from this date.
All tickets issued during the period of Chapter 11 bankruptcy protection (14 September 2005 to 29 April 2007) will not be covered.
17 April 2007
LAB Airlines (Lloyd Aereo Boliviano)
Please be advised that operations for LAB Airlines (Lloyd Aereo Boliviano) have been suspended by IATA with effect from 3 April 2007 until further notice.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
2 March 2007
Fly Me Sweden AB
Recent press reports have brought to our attention that Fly Me Sweden AB intends to file for bankruptcy and has ceased all operations with effect from 2 March 2007.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
14 February 2007
Slovak Airlines
Recent press articles have brought to our attention that Slovak Airlines will enter bankrupty proceedings following majority owner Austrian Airlines Group’s decision to take possession of two of its three aircraft.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
18 December 2006
Air Madrid
Recent press articles have brought to our attention that Air Madrid has halted operations following the suspension of their operating license. In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Any tickets issued on Air Madrid on or after 15 December 2006 will not be covered.
All tickets issued prior to 15 December 2006 will be covered and claims accepted in the event that the airline fails financially.
2 November 2006
Ajet (formerly Helios Airways)
Recent press articles have brought to our attention that Ajet (formerly Helios Airways) has halted operations following the suspension of their operating license due to financial difficulties. In accordance with the terms of our policy cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Any tickets issued on Ajet on or after 2 November 2006 will not be covered.
All tickets issued prior to 2 November 2006 will be covered and claims accepted in the event that the airline fails financially
15 September 2006
Origin Pacific
Recent press information and an announcement on Origin Pacific’s website confirmed that this Nelson-based (New Zealand) regional airline is in receivership and has ceased to trade with effect from 15 September 2006. Therefore, all tickets issued prior to 15 September 2006 are covered under the terms of IPP’s Scheduled Airline Failure Insurance providing an Origin Pacific document has been issued.
12 September 2006
BWIA
Recent press information has brought to our attention an announcement from BWIA that it is to shut down by 31 December 2006 with ongoing financial difficulties. In accordance with the terms of our policy cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Any tickets issued on BWIA on or after 12 September 2006 will not be covered.
All tickets issued prior to 12 September 2006 will be covered and claims accepted in the event that the airline fails financially.
20 July 2006
Air Turquoise
On July 18th 2006, Air Turquoise declared the suspension of payments at the Tribunal of Commerce in Reims. The company was heard by the court on July 19th 2006. The judgement was pronounced at 2pm : the company was put in liquidation with a continuation of activity until July 31st, 2006. This continuation period has been set to give potential investors time to make an offer to purchase the company's assets. The court has appointed Me Jean-Luc Mercier to manage the request for proposal process.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
27 March 2006
Styrian Spirit
Recent press information and an announcement on Styrian Spirit’s website has confirmed the insolvency proceedings of this airline as from 27th March 2006, therefore all tickets issued prior to 27th March 2006 are covered under the terms of IPP’s Scheduled Airline Failure Insurance Policies provided a Styrian Spirit document has been issued.
24 February 2006
Aloha Air
Aloha Air exited Chapter 11 bankruptcy protection on 24 February 2006. In accordance with the terms of our policy, cover for Scheduled Airline Failure is now reinstated for this airline from this date.
1 February 2006
United Airlines
United Airlines exited Chapter 11 bankruptcy protection on 1 February 2006. In accordance with the terms of our policy, cover for Scheduled Airline Failure is now reinstated for this airline from this date.
1 January 2006
European Commission Bans 92 Airlines from operating in the EU
The safety of air transport has been a top priority for the European Community ever since the introduction of a common air transport policy. Regulation 2111/2005 EC, which entered into force in January 2006, is a further step towards enhancing European air safety and passenger protection by allowing the European Commission to ban or restrict the activities of unsafe airlines within the European Union.
The Commission has consequently established an initial list of airlines considered to be unsafe and therefore not permitted to fly passengers or cargo in the EU or operate within European airspace.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for these Airlines. A list of the banned Airlines can be found listed on the European Unions website by clicking the following link
7 November 2005
FLYi / Independence Air
Recent press information has brought to our attention that US based FLYi Inc and its subsidiaries, including low-cost airline Independence Air, filed for Chapter 11 Bankruptcy Protection on 07 November 2005.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Please be advised that any tickets issued for FLYi / Independence Air from 07 November 2005 will not be covered in the event that the airline fails financially.
All tickets issued prior to 07 November 2005 will be covered and claims will be accepted in the event that the airline fails.
18 October 2005
Olympic Airlines
Olympic Airlines has been placed in temporary creditor protection. Until further notice, and in accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline. Please be advised that any tickets issued for Olympic Airlines from 18 October 2005 will not be covered in the event that the airline fails financially.
All tickets issued prior to 18 October 2005 will be covered and claims will be accepted in the event that the airline fails. Should Olympic Airlines withdraw from creditor protection, and cover be reinstated, we shall advise you.
13 October 2005
Mesaba Airlines
Recent press information has brought to our attention that regional US carrier, Mesaba Airlines
(code XJ), filed for Chapter 11 Bankruptcy Protection on 13 October.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Please be advised that any tickets issued for Mesaba Airlines from 13 October 2005 will not be covered in the event that the airline fails financially.
All tickets issued prior to 13 October 2005 will be covered and claims will be accepted in the event that the airline fails.
Should Mesaba Airlines withdraw from Chapter 11 protection cover will be reinstated with immediate effect, following written notification from the airline.
27 September 2005
US AIRWAYS
US Airways, exited Chapter 11 bankruptcy protection on 27 September 2005. In accordance with the terms of our policy, cover for Scheduled Airline Failure is now reinstated for this airline from this date.
Please be advised that any tickets issued on US Airways from 27 September 2005 will be covered in the event that the airline fails financially.
All tickets issued during the period of Chapter 11 bankruptcy protection (13 September 2004 to 26 September 2005) will not be covered.
15 September 2005
NORTHWEST AIRLINES
The 4th largest airline in the United States, Northwest Airlines , filed for Chapter 11 bankruptcy on 14September 2005.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Please be advised that any tickets issued for Northwest Airlines from 14 September 2005 will not be covered in the event that the airline fails financially.
All tickets issued prior to 14 September 2005 will be covered and claims will be accepted in the event that the airline fails.
Should Northwest withdraw from Chapter 11 protection cover will be reinstated with immediate effect, following written notification from the airline.
For further information, please see their website: www.klmtradeuk.com
15 September 2005
DELTA AIR LINES
The 3RD largest airline in the United States, Delta Air Lines, filed for Chapter 11 bankruptcy on 14September 2005.
In accordance with the terms of our policy, cover for Scheduled Airline Failure is withdrawn with immediate effect for this airline.
Please be advised that any tickets issued for Delta from 14 September 2005 will not be covered in the event that the airline fails financially.
All tickets issued prior to 14 September 2005 will be covered and claims will be accepted in the event that the airline fails.
Should Delta withdraw from Chapter 11 protection cover will be reinstated with immediate effect, following written notification from the airline. For more information please see Delta’s website www.delta.com
27 July 2005
EUjet
EUjet, a low cost carrier based at Kent International Airport, Manston, has suspended all flight operations following its parent company, Planestation, filing for voluntary administration on 26th July. All tickets issued prior to 26th July are covered under the terms of IPP’s Scheduled Airline Failure Insurance Policies.
7 June 2005
Varig Brazilian Airlines (Viacao Aerea Riograndense SA)
Varig Brazilian Airlines (Viacao Aerea Rio-Grandense SA), Latin America’s biggest airline, filed for protection from creditors in Brazil and the US on Friday 17 June 2005 as it seeks to restructure its mountain of debt. Varig, founded 78 years ago, is the first company to seek protection under Brazil’s week-old bankruptcy law. Varig carries 13 million passengers annually and has 11,456 full-time employees. The company has service to 36 cities in Brazil and destinations in 20 additional countries, according to court papers. IPP policy holders should be aware that the conditions in their Policy relating to carriers under bankruptcy protection (such as Chapter 11) apply. All tickets issued for Varig Brazilian Airlines prior to 17 June 2005 are covered.
2 June 2005
Hawaiian Airlines
Hawaiian Holdings, the parent company of Hawaiian Airlines, announced that the airline emerged from Chapter 11 bankruptcy protection on 2nd June 2005. The requisite financing was secured to enable the company to exit Chapter 11. Consequently from this date this airline is now fully covered under IPP Scheduled Airline Failure Insurance policies.
30 December 2004
Aloha Airlines Inc
Aloha Airlines a US airline based in Honolulu, Hawaii, filed for Chapter 11 bankruptcy on 30 December 2004. The airline operates a fleet of 737 aircraft between Hawaii and the US and Canadian West coasts as well as inter-island services and services to US territories in the Pacific. The airline has pledged that it will be business as usual during the restructuring of the group and that emergence from Chapter 11 would be as expeditious as possible.
IPP cover for Aloha Airlines ticketed flights is withdrawn from the 30th December 2004. Any tickets issued prior to the 30th December 2004 are fully covered.
30 September 2004
AIR CANADA
Air Canada has exited the creditor/bankruptcy protection of the Canadian Courts under the Companies? Creditors Arrangements Act (CCAA) on the 30th September 2004.
The airline has successfully restructured and effected significant cost savings that ensure its future viability.
As a result, with effect from 30 September 2004, cover is reinstated under the terms of IPP?s Scheduled Airline Failure policies.
1 May 2004
Duo Airways Ltd
Duo Airways Ltd, a short-haul airline based in Birmingham, UK, ceased to trade on the 1st May 2004 and all flights were suspended then. Deloitte, of 201 Deansgate, Manchester, M60 2AT, have been appointed as administrators to Duo Airways Ltd. Tickets issued prior to 01 May 2004 are covered under the terms of IPP’s policies.
25 February 2004
Jetmagic
Jetmagic, a low cost regional Irish airline based in Cork, announced the suspension of its operations on 28th January 2004 and an Extraordinary Meeting of shareholders would consider winding up the company. The airline had routes to London City, Edinburgh, Liverpool and Belfast. Tickets issued prior to 28 January are covered under the terms of IPP’s policies.
25 March 2003
Avianca
Avianca, the Colombian Airline, has filed for Chapter 11 bankruptcy in the United States. This action has been taken to permit ‘aggressive restructuring’ of the company. Other companies in the alliance, Alianza Summa, (SAM and Aces of Colombia) are not affected. Under the terms of IPP’s Scheduled Airline Failure Policy, cover is withdrawn with effect from 21st March 2003, the date of the Chapter 11 filing. All tickets issued prior to this date are covered.
9 December 2002
UNITED AIRLINES
United Airlines, the second largest US and World airline, has filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. The airline has pledged that it is business as usual and that during this period of creditor protection the airline will restructure its finances and rationalise its business plans, thus ensuring its stronger and more financially viable future. IPP Policy Holders should be aware that the conditions in their Policy relating to carriers under bankruptcy protection (such as Chapter 11) apply. All tickets issued for United Airlines prior to 9th December 2002 are covered.
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