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October 2005 Aviation
News
Aeroflot
Board Approves Airbus Lease (2005-10-27)
MOSCOW, Oct 27 (Reuters) - The board of directors of Russia's
flagship carrier Aeroflot has approved the lease of five Airbus
A320 airliners, the company said on Thursday. Aeroflot has
already said it would acquire seven A321 aircraft to upgrade its
fleet. "The (board) decision was positive. We are now
hoping that by spring 2007 we'll have 12 planes of the A-320
family: five A-320s and seven A-321s," Alexander Kanishchev,
head of Aeroflot's flight network department, told reporters.
Kanishchev said Aeroflot would acquire five planes through a
leasing agreement, and seven planes directly from Airbus. Airbus
is 80-percent owned by EADS with the balance held by BAE Systems
Plc. Aeroflot's Deputy General Director Igor Desyatnichenko
separately said that the company would decide on Nov. 3 on a
type of long-haul aircraft it wants to acquire from 2009 --
Boeing 787 or Airbus A350. Separately, Itar-Tass news agency
quoted Alexander Korolyov, an Aeroflot finance official, as
saying the company planned to raise its fuel surcharge by $5 on
a number of domestic flights from November.
Nav
Canada Reports Traffic Figures
(2005-10-26) OTTAWA, NAV CANADA today announced its traffic
figures for the month of August 2005, and for the fiscal year
2005, as measured in weighted charging units for en-route,
terminal and oceanic air navigation services, in comparison to
the last fiscal year. The traffic in August 2005 increased by an
average of 4.8 per cent compared to the same month in 2004.
Traffic for the complete fiscal year 2005 was 5.0 per cent
higher than in fiscal year 2004. NAV CANADA's fiscal year runs
from September 1 to August 31. Weighted charging units represent
a traffic measure that reflects the number of flights, aircraft
size and distance flown in Canadian airspace.
Boeing
Aims to Launch New 747 Advanced by the Year-end
(2005-10-21) PARIS A federal judge on Friday approved a
financial disclosure statement from UAL Corp., clearing
the way for the parent of No. 2 U.S. carrier United Airlines to
promote its reorganization plan and exit bankruptcy next year.
UAL also got the green light for a six-year, $3 billion exit
financing deal with JP Morgan. The company secured the all-debt
financing earlier this month.
The
aircraft will carry 450 passengers, compared with 416 on the
747-400, and will have a slightly longer range of 8,000 nautical
miles. Trip costs will be 6 percent lower than the biggest 747
model so far produced, Baseler said. Boeing had said this month
that it expected an announcement on the 747 Advanced soon.
"Most interest is in a freighter," Baseler told a
Paris news briefing. Boeing has not recently sold any passenger
versions of the 747 due to a glut of aircraft accumulated during
a steep recession, from which the industry rebounded sharply
this year. Baseler said the global market for large commercial
jets, in which Boeing competes with Airbus, should reach a
record of about 1,600 orders in 2005.
If
the industry follows its normal historical pattern, the number
of orders should dip in 2006, he said, adding however that
deliveries were a better way of monitoring the cycle. Baseler also spelled out differences between Boeing and
Airbus on which way the airline industry is heading over the
next 20 years. Both foresee sharp growth in aircraft demand as Asian
economies open up further but disagree over how the passenger
growth will be shared among aircraft types. Airbus wants its new A380 superjumbo to be catalyst for a new
market for planes carrying more than 500 people between major
transport hubs. Boeing, which had monopolised the jumbo jet market until
Airbus designed the A380, switched its focus to the 200 to 300
seat range, arguing that it was better to fly people directly to
their destinations than to force them to change planes at
regional hubs. Baseler said Boeing targeted a market of no more than 300
planes in the segment above 450 seats, less than one-quarter of
Airbus's goal of selling 1,250 of its A380 planes.
Judge
Approves UAL Financial Disclosure Statement
(2005-10-21) CHICAGO A federal judge on Friday approved a
financial disclosure statement from UAL Corp., clearing
the way for the parent of No. 2 U.S. carrier United Airlines to
promote its reorganization plan and exit bankruptcy next year.
UAL also got the green light for a six-year, $3 billion exit
financing deal with JP Morgan . The company secured the all-debt
financing earlier this month.
Judge
Eugene Wedoff said at a UAL bankruptcy hearing that he had
approved the disclosure statement. Wedoff on Thursday overruled
some objections, accepted resolution of others and signaled he
intended to sign off on the statement, which details UAL's
financial model. Some objections to the statement, however, are
likely to be debated as they pertain also to the carrier's
reorganization plan, which still needs approval. "We're
going to resolve as many of these issues as we possibly
can," UAL Chief Financial Officer Jake Brace told
reporters. The deadline for objections to the reorganization
plan is Dec. 12. The document needs approval from creditors and
from the bankruptcy court.
One
outstanding issue stems from a resolved objection to the
disclosure statement from the Pension Benefit Guaranty Corp.,
the government agency that insures corporate pensions. The PBGC
last week complained that UAL's disclosure statement was
inconsistent with a settlement last spring for the airline to
turn its underfunded pensions over to the government. The
document violates the settlement by restricting its ability to
sell securities the government would receive from UAL after
exiting bankruptcy, the PBGC said. The PBGC, which took over
UAL's underfunded pensions, removed its objection to the
statement and said it still was in discussions with the airline
to resolve the dispute. The agency, however, reserved its right
to object to the company's reorganization plan if no agreement
is reached.
UAL has been in bankruptcy since December
2002. The filing of its disclosure statement and reorganization
plan in September marked the beginning of the carrier's
emergence from Chapter 11 protection from creditors. UAL aims to exit bankruptcy in February.
Transat
Adopted New Business Plan
(2005-10-20) MONTREAL As previously announced, the Board of
Directors of Transat A.T. Inc. ("Transat") is
informing shareholders and the investment community of the
following decisions. The Board has approved a three-year
strategic plan to foster growth and capitalize on the Company's
position among the largest travel and tourism companies
worldwide. In addition, following a thorough review of the
Company's business environment and outlook for fiscal 2006, and
taking into account the newly approved strategic plan, the Board
has decided to proceed with a return of capital of $125 million.
Finally, the Board has considered and ruled out the option of
converting Transat into an income trust. In view of the above,
the Company wishes to update its shareholders and the investment
community on its strategic plan, business outlook and use of
cash.
Strategic
Plan
The
Board has unanimously approved a three-year strategic plan that
focuses on growth and increased profitability in coming years,
based on an expansion of operations in current and new markets,
as well as the implementation of strategies to increase margins.
"In our 18 years operating as a public company, we have
grown to become one of the largest players in our industry
globally. We have determined that the creation of value for our
shareholders calls for further growth and the penetration of new
markets. This will be achieved through organic growth,
acquisitions and maximizing the benefits of vertical
integration," said Jean-Marc Eustache, Chairman and Chief
Executive Officer.
The
plan can be summarized as follows:
-
In Canada - Become a market leader across Canada, mainly by (a)
expanding Transat's presence in Ontario; (b) developing new
destinations; and (c) increasing the scope of the Company's
distribution network. -
In Europe - Increase market share and pursue vertical
integration in France and the United Kingdom, two high-potential
markets where the Company already has a strong presence. The
Company will also pursue efforts to expand its presence as a
major tour operator in other European countries, especially to
Canadian destinations. -
New Markets - Become a significant tour operator in the United
States. The Company has been studying and prospecting that
market for some time now and believes that establishing a
presence in the US is strategically important. In addition,
expanding operations into other markets like Asia and Latin
America will continue to be considered. -
Destination services and accommodation - Accelerate the
development of destination services and gain control of a
portion of Transat's accommodation needs. This will allow the
Company to better control its capacity and the quality of its
product, and increase margins. Destinations where Transat
already has critical mass will be prioritized.
The
Company anticipates that up to $300 million over three years
will be needed to execute its strategic plan which would be
funded through a mix of cash on hand, future cash flows and
external sources, if required.
Transat
will not seek to adopt an income trust structure. Management and
the Board of Directors do not believe that the business of
Transat is suitable as an income trust, given the volatility of
cash flows in the tourism industry and the ongoing risk for
unforeseen events that can materially affect results. In
addition, there is significant uncertainty in the market
regarding the status of income trust conversions in Canada.
WestJet
VP Operations Steps Down (2005-10-18)
CALGARY WestJet today announced that Thomas (Tim) Morgan,
Executive Vice-President of Operations, has left WestJet for
personal reasons, effective immediately. Since WestJets
inception in 1995, Mr. Morgan has been instrumental in the
development of the operational philosophies that have
contributed to the success of the airline. Clive Beddoe,
WestJets President and CEO, commented: It is with regret
that I announce that Tim Morgan is leaving WestJet. As a
founding shareholder, Tim has been with WestJet since our
inception, and has contributed greatly to our success over the
past 10 years. The three operating vice-presidents who reported
to Mr. Morgan will now be reporting to WestJet's president and
CEO. WestJet is Canada's leading low-cost airline offering
scheduled service throughout its 34-city North American network.
Named Canada's most respected corporation for customer service
in 2005, WestJet pioneered low-cost high-value flying in Canada.
With increased legroom and leather seats on its modern fleet of
Boeing Next-Generation 737 aircraft, and live seatback
television provided by Bell ExpressVu on its 737-700 fleet,
WestJet strives to be the number one choice for travellers.
Canada
and US start New Open Skies Talks
(2005-10-18) OTTAWA The United States and Canada will soon
embark on negotiations to update a decade-old open skies
agreement, the spokeswoman for Canadian Transport Minister Jean
Lapierre said on Tuesday. Irene Marcheterre, said negotiations
would begin in 10 days to two weeks with the goal of offering
customers better prices and more choice.
Two areas that will not be on the agenda, however, will be the
idea of Canadian airlines operating between two U.S. cities and
vice versa, and increasing limits on foreign shareholdings,
Marcheterre said. The target is to wrap up talks next year, she
said. Canada's two leading carriers are Air Canada, owned by Ace
Aviation Holdings Inc., and WestJet Airlines.
Bombardier's
Deal with SkyWest
(2005-10-11) TORONTO Bombardier Aerospace announced today that
SkyWest Inc. of St. George, Utah has concluded a purchase
agreement for 22 Bombardier CRJ700 regional jets for its Delta
Connection operation. The transaction includes conversion rights
to other Bombardier CRJ aircraft. In addition, the 80 options
for CRJ700 aircraft previously announced were reaffirmed as part
of this agreement.
The
revised contract is valued at approximately $798 million US. If
all options are exercised, the entire order could be worth $ 3.7
billion US. This transaction converts the 18 Delta Air Lines
CRJ200 aircraft on backlog assumed by SkyWest as part of their
recent acquisition of Atlantic Southeast Airlines (ASA) and
includes four incremental orders. SkyWest also retains 15 CRJ700
firm orders on Bombardier's backlog from a previous transaction.
"With
our recent purchase of Atlantic Southeast Airlines, we agreed to
add 22 regional jets to the Delta Connection route
network," said Jerry Atkin, Chairman, President and Chief
Executive Officer, SkyWest Inc. "The CRJ700 continues to
meet our growth requirements because of the benefit of
commonality with existing CRJ fleets at SkyWest Airlines and
Atlantic Southeast Airlines.""We
are very proud of our long partnership with SkyWest," said
Steven Ridolfi, President, Bombardier Regional Aircraft.
"We appreciate this endorsement of the CRJ Series and the
CRJ700 as the regional jet of choice for both SkyWest and Delta
Connection in order to meet their future system and market
requirements. The CRJ700 aircraft's low operating costs
represent a real benefit to operators in today's challenging
market." The current combined fleets of SkyWest Inc. owned
airlines include 229 CRJ200 and 72 CRJ700 aircraft. The
Bombardier CRJ Series firm order book now stands at 1,440 with
1,294 delivered as of August 31, 2005.
Delta
Back to Full Flight Schedule (2005-10-07)
Delta Air Lines Inc. will return tomorrow to its full flight
schedule, after canceling certain flights to conserve fuel in
the aftermath of Hurricanes Katrina and Rita..
The
bankrupt Atlanta airline said its short-term emergency fuel
conservation program lasted about two weeks, and will end Oct.
8, as fuel supplies in the Southeast have stabilized following
damages sustained from the recent hurricanes.
FedEx/Morningstar
Cessna 208B Crashed in Winnipeg (2005-10-06)
The Winnipeg controller cleared Morningstar flight 8060 for
takeoff from runway 36 at 05:36. Just over one minute later the
flight was identified on radar and cleared to climb to 9000 feet
and then direct to Thunder Bay. The airplane apparently entered
icing conditions, because at 05:41 the pilot reported: "...
eight zero six zero need an immidiate back to the field".
The controller replied: "Sixty, say again," after
which the pilot reported: "Need an immediate back to the
field.. I'm iced-up to the point where I need to come
back." The controller then gave instructions to return to
Winnipeg: "Morningstar eighty sixty turn right turn heading
250 and if you are able maintain 2500". The pilot replied
that she would not be able to maintain that altitude. This was
the last radio contact from the flight. The controller then
instructed the pilot to turn right to heading 280 for runway 31.
The runway lights were turned up to the brightest and the
controller reported that she would have the airport at her two
o'clock position at about three miles. The Cessna did not make
it and crashed on the Canadian National main railway track about
200 yards east of the intersection of Osborne Street and Corydon
Avenue and burst into flames.
The
METAR around the time of the accident (10:42UTC) was:
Judge
OKs $1.9 Bln. Financing for Delta
(2005-10-06) NEW YORK (Reuters) - A U.S. bankruptcy court judge
on Thursday approved a $1.9 billion package of loans for
bankrupt Delta Air Lines as it seeks to reorganize under federal
bankruptcy protection.
Delta
filed for Chapter 11 bankruptcy last month and has been
negotiating with its creditors since then as it looks to dig
itself out. Delta and rival Northwest Airlines both filed for
bankruptcy on September 14. With respective assets of $21.6
billion and $14.4 billion, Delta and Northwest were the second-
and third-largest U.S. airline bankruptcies ever. Delta's was
the ninth-largest U.S. bankruptcy ever.
On
Thursday, Delta attorney Marshall Huebner said positive
reception for the loan among Delta's group of lenders, including
General Electric Co.'s GE Commercial Finance and investment bank
Morgan Stanley, allowed the company to obtain an additional $200
million on top of the $1.7 billion it initially sought, and at a
rate of 11.198 percent, about 0.3 percentage point below what
the airline had anticipated. Huebner
said $50 million of the total would be used to pay down a higher
interest, $350-million loan the airline received from American
Express Co. at the time of the bankruptcy filing. The
higher debtor financing total, plus the reduced American Express
loan means that the airline now has $2.2 billion in
post-petition financing, an increase of $1.22 billion from its
secured loan facilities before the bankruptcy, Delta said in a
statement. Judge
Prudence Beatty approved the loans, known as
debtor-in-possession financing. She also gave final approval for
the sale of Delta's regional carrier Atlantic Southeast Airlines
to Skywest Inc., which will give Delta an additional $125
million. Delta shares rose 6 cents,
or 7.6 percent, to close at 85 cents in afternoon trading on the
New York Stock Exchange.
The
judge postponed until October 17 a ruling on whether Delta
should be forced to make contributions to its pilots' pension
plans, as pilots union the Air Line Pilots Association and the
Pension Benefit Guaranty Corp. have argued.
The
airline is arguing that it should not have to make a $158
million payment to the pilots' main pension plan due October 15
and should be allowed to freeze $84 million a year in
supplemental payments to retired pilots.
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