Panalpina posts 1st quarter results

(Panalpina chief executive Peter Ulber)

    

Panalpina continued to gain airfreight market share in in the first quarter of 2014, with a 6.3 per cent rise in volumes that outpaced the industry’s 4 per cent benchmark growth.

 

“We had a decent start into 2014,” says Panalpina chief executive Peter Ulber. “In the first three months of the year, air and ocean freight showed continued growth ahead of the market, and in Logistics we made progress in reducing the losses.”

 

The Switzerland-based global logistics group saw its air cargo volumes rise to 203,900 tonnes, a performance that compares well with the number one air cargo freight forwarder, Kuehne+Nagel.

 

K+N, also based in Switzerland, reported a 1.4 per cent increase in airfreight volumes to 285,000 tons in the first quarter 2014.

 

Panalpina’s gross profit per airfreight tonne decreased 1per cent to SFr754 versus like three month period 2013. Airfreight gross profit reached SFr153.7m, up from SFr146m in the comparable period.

 

The air cargo division achieved earnings before interest and tax of SFr26.0m, up from SFr22.2 m. 

Panalpina’s outlook for the airfreight market remains unchanged. The company expects to outperform a forecast global sector growth of between 2 per cent to 3 per cent in 2014.

 

In the airfreight market, where Panalpina is the fourth largest logistics player, the strategy is “to stabilise performance, grow volumes above market and to focus on profitable growth”.

 

In Panalpina’s group wide outlook for the year ahead, Ulber adds: “In the context of difficult market conditions, the results for the first quarter are very encouraging. Our systematic restructuring activities to turn around the company’s loss-making operations are ongoing and on track, but these activities will continue to influence the financial results in the short term.” 

 

(Roger Hailey - Air Cargo News)

Air Bridge Cargo reports strong 1st quarter results

Air Bridge Cargo Airlines, Russia’s largest freighter airline has commenced its 10th anniversary year with the strongest first-quarter in its history, with volume up nine per cent to 86,500 tonnes.

ABC says the improvement reflects market advances in Russia, Europe, the Americas and Asia Pacific as well as the success of its own sales activities.
 

Freight ton-kilometres in the first three months of 2014 rose by 13 per cent, far exceeding the industry average of four per cent growth in the period.
 

Load factor for the quarter was 71 per cent, again considerably higher than the industry average, says ABC.
 

In the first three months of 2014, ABC added Dallas, Leipzig and Malmo as new on-line destinations, and increased its frequencies to and from Chicago.
 

“The additional operations strengthen ABC’s position in the European and North American air cargo markets. By adding new destinations and improving connectivity with the Moscow hub, we are able to offer an increased choice of routes and connections for international customers,” says a statement.
 

The airline’s continued focus on improving its performance levels led to further gains in Q1, increasing its Delivered-As-Promised performance to 78%.
 

The Russian carrier celebrated the 10th anniversary of its first commercial flight on 23 April. Its maiden flight in 2004 was between Moscow’s Domodedovo airport and Beijing.
 

ABC started as a Volga-Dnepr Group project and over its subsequent 10-year journey has earned its place among the world’s major international cargo airlines.
 

In 2004 the airline operated a single B747-200 and served five destinations. Now it is proud to operate a fleet of 12 B747 freighters (five B747-8s and seven B747-400s).
 

In 2013, ABC carried 340,000 tonnes and flew 2.6 million FTKs, achieving an average load factor achieved of 72 per cent.
 

Denis Ilin, ABC’s executive president, says: “We value long-term partnerships and look forward to achieving further growth together.”

(Nigel Tomkins - Air Cargo News)

Southwest Airlines CEO Gary Kelly plans on-time fix

Southwest Airlines is falling behind other airlines when it comes to arriving on time, and the carrier plans to tinker with its flight schedule to fix that.

CEO Gary Kelly says the airline will add a few minutes between some flights, and it will be more cautious about selling itineraries with tight connections between flights.

Southwest has long prided itself for being on time. It still ranks No. 1 all-time among the six big airlines that have been reporting such records to the government since 1987. But it hasn't topped the charts for a full year since 2001 and hasn't beaten all the other major carriers since 2009.

Last year, Southwest fell to 12th place — and behind all its closest rivals in size: United, Delta, American and US Airways — among 16 airlines that reported figures to the U.S. Department of Transportation. Only 76.7 percent of Southwest flights arrived within 14 minutes of schedule, which is the government's definition of being on time. That was down from 83.1 percent in 2012.

"We've got significant schedule changes that are planned for the summer," Kelly said. "That's when I want to be monitoring the on-time performance and making sure that we see the improvement that we need. We need to get back to where we were for 2012."

Kelly made the comments to reporters Tuesday during a tour of Southwest Airlines Co.'s new $120 million training building, which also houses a new operations center where staffers will oversee the 3,600 daily flights operated by Southwest and its AirTran Airways subsidiary.

The on-time breakdown starts at the airport gate. Southwest was once legendary for turning around incoming planes and sending them back out for the next flight in about 10 minutes. That "turn time" has slipped to about 30 minutes as planes have filled more seats, Southwest has added newer and larger versions of the Boeing 737 jet to carry more passengers, and it has added flights at congested big-city airports.

Compounding matters last year, Southwest began packing more flights into the peak hours of the day when most customers wanted to fly. The move backfired.

"We tried to get a little more aggressive in 2013, and it probably is the cause of our dip in on-time performance," Kelly said. But, he said, customers like the busy schedules that offer more itineraries. He added that improving the on-time rating must be balanced against the risk of losing revenue by failing to offer all the itineraries that passengers want.

"As long as we're operating a full airplane," Kelly said, "I don't mind spending an extra minute or two turning it."

(David Koenig - Associated Press)

New G650 arrives in Long Beach

Gulfstream G650 (c/n 6087) N687GA arrives at Long Beach Airport (LGB/KLGB) as "GLF48" from Savannah Hilton Head International Airport (SAV/KSAV) at 17:38 pst on April 29, 2014.

(Photo by Michael Carter)

Centurion Cargo plans MD-11F retirement

This was reported on April 22, 2014 but one I missed so I am adding it on the blog today since many of you are MD-11 fans as I am.

(Michael Carter - Editor APF) 

Centurion Cargo MD-11F (48247/471) N987AR arrives at Los Angeles International Airport (LAX/KLAX) on November 6, 2013.

(Photo by Michael Carter)

Miami-based all-cargo carrier Centurion Cargo confirmed to Cargo Facts that it plans to retire the nine MD-11 freighters in its own fleet and the fleet of sister carrier SkyLease Cargo over the next two to three years, replacing them with a smaller number of 747-400 freighters.

At present, Centurion and SkyLease operate a total of two 747-400 freighters (one -400F and one -400ERF) and nine MD-11Fs. The first of the new freighters is a 747-400ERF (33096) formerly leased from ILFC by Air France and now in the process of being re-registered to Centurion/SkyLease.

It will enter service shortly, and a second 747-400ERF (believed to be one of the two currently in the Air France fleet) will follow in September. Centurion has not indicated the retirement schedule for the MD-11Fs, but it is likely that two or three will be retired this year.

Centurion did not provide the timing and source of future 747-400 additions, but Cargo Facts believes they will be units currently in the fleet of Air France-KLM, which is in the process of severely cutting back freighter operation, and possibly exiting the freighter business completely.

AF-KLM currently operates five 747-400ERFs (two at Air France, three operated for KLM by subsidiary carrier Martinair), two 777Fs (at Air France), and six MD-11Fs (all at Martinair).

From its Miami hub, Centurion/SkyLease currently serves fifteen destinations in Latin America as well as Los Angeles in the US, and Amsterdam in Europe.

(David Harris - Cargo Facts News)

Amerijet introduces new service

Amerijet International 767-232(BDSF) (22218/31) N743AX arrives at Miami International Airport (MIA/KMIA) on January 14, 2011.

(Photo by Michael Carter)

Fort Lauderdale-based Amerijet International  signed a long-term lease agreement with Rickenbacker International Airport (LCK/KLCK) in Columbus, Ohio for a 20,000 square foot facility, which it will use as the eastern hub in a new US domestic express freight network.

The western hub will be at Reno/Tahoe International (RNOKRNO) in Reno, Nevada, and Amerijet will offer six weekly 767-200F frequencies connecting the two hubs beginning 7 July this year.

Amerijet will combine the Columbus/Reno air link with road feeder service at both ends to connect the Eastern and Western US.

Amerijet’s Sr. V.P. Business Development Pamela Rollins said, “Amerijet’s dedicated B767 freighter service will provide our customers with additional options for expedited and heavyweight domestic freight.

We believe this product fills the need for select services once the mainstay of companies such as Burlington Air Express, Kitty Hawk, Emery and  other all cargo carriers who did not survive the economic turmoil of the last decade.

Our new freighter service is ideal for shipments moving on long-haul lanes over 1,500 miles, especially those in need of time-critical and high-value, temperature controlled or hazardous material shipments.”

As Ms. Rollins points out, there was once no shortage of airlines offering scheduled US domestic heavyweight freight service, but one-by-one they have gone out of business.

Many observers concluded from this that such service is no longer needed, but, obviously, Amerijet thinks differently.

(David Harris - Cargo Facts News)

It's official, Star Wars: Episode VII cast announced

***I know this isn't aviation news but I am such a huge "Star Wars" fan I had to post this to the blog!***

 

(Michael Carter.....Editor APF)

It's official! After months of speculation, Disney and Lucasfilm has announced the cast for "Star Wars: Episode VII."

Carrie Fisher, Mark Hamill, and Harrison Ford will all reprise their roles as Princess Leia, Luke Skywalker, and Han Solo in the film.

Joining them will be newcomer John Boyega, who will appear in FOX's upcoming "24: Live Another Day" miniseries, Oscar Isaac ("Inside Llewyn Davis"), and Adam Driver ("Girls").

Boyega was among the actors rumored for the lead in the sequel.  Driver is expected to play the main antagonist. His character has been described to be "in the vein of iconic Darth Vader."

Previously, it was reported Peter Mayhew would return as Chewbacca. Joining him will be Kenny Baker as R2-D2 and Anthony Daniels as C-3PO.

Daniels let it slip last October he may return for "Episode VII" at New York Comic Con.

Not much is known about the film's plot; however, it's rumored that Harrison Ford will have quite a large role in the film.

"Star Wars: Episode VII" will be released December 18, 2015.

Here's the release:

The Star Wars team is thrilled to announce the cast of Star Wars: Episode VII.

Actors John Boyega, Daisy Ridley, Adam Driver, Oscar Isaac, Andy Serkis, Domhnall Gleeson, and Max von Sydow will join the original stars of the saga, Harrison Ford, Carrie Fisher, Mark Hamill, Anthony Daniels, Peter Mayhew, and Kenny Baker in the new film.

Director J.J. Abrams says, "We are so excited to finally share the cast of Star Wars: Episode VII. It is both thrilling and surreal to watch the beloved original cast and these brilliant new performers come together to bring this world to life, once again. We start shooting in a couple of weeks, and everyone is doing their best to make the fans proud."

Star Wars: Episode VII is being directed by J.J. Abrams from a screenplay by Lawrence Kasdan and Abrams. Kathleen Kennedy, J.J. Abrams, and Bryan Burk are producing, and John Williams returns as the composer. The movie opens worldwide on December 18, 2015.

(Kirsten Acuna - Business Insider)

Consultants say Southwest Airlines would be best choice for two AA gates at Love Field

The U.S. Department of Justice and the City of Dallas seem to be at odds over which airline should get two gates at Dallas Love Field that American Airlines must divest following its merger last year with U.S. Airways.

 

Aviation consultants hired by the city of Dallas have concluded that Southwest Airlines would be the city’s best choice to get two available gates at Dallas Love Field.

 

L.E.K. Consultants said the “city’s main objective” should be to maximize the number of passengers originating or ending their trips at Love Field and Dallas/Fort Worth International Airport, “as that would represent maximum utility for stakeholders.”

 

“Based on fleet plans and potential cannibalization at D/FW, Southwest would likely drive the most passenger traffic across both DAL [Love Field] & D/FW,” the consultants said in a report to the city.

 

The Dallas City Council’s Transportation and Trinity River Project Committee is scheduled to discuss the Love Field gates Monday afternoon.

 

American Airlines Inc. is required to divest the gates as part of a lawsuit settlement with the U.S. Department of Justice, which had sued American and US Airways Inc. in 2013 to block their planned merger.

 

The Justice Department has told American that it wants Virgin America to get the gates, which are among 20 gates in the new Love Field terminal nearing completion. Twelve of the gates are already in use.

 

The work is scheduled to be done before Oct. 13, the date that federal restrictions on Love Field flights expire. After that date, carriers can fly to any U.S. airport out of the Dallas airport, ending more than 34 years of limited service.

 

Southwest, which controls 16 of the new gates, is lobbying for the two American gates as well. Southwest has already named 15 cities that would get nonstop service when the federal limits expire, and promised service to 17 additional cities if it got the extra gates.

 

Delta Air Lines Inc. also is pushing to be able to fly out of Love Field, even though the Justice Department said March 10 that the Atlanta-based carrier was “not an appropriate divestiture candidate” for the Dallas gates.

 

Virgin America chairman Don Carty and chief executive David Cush on Friday said they had approval from the Justice Department and American to get the gates, and said they expected City Manager A.C. Gonzalez to approve the transfer of the gates. Virgin America started offering introductory $79 nonstop fares out of Love Field on Friday.

 

Carty called the lease transfer “a relatively routine matter. I don’t know that this city has ever interfered with the transfer of a lease between two private parties.”

 

“I think it’s pretty clear that these transfers get approved unless there’s an overwhelming reason not to approve them,” Carty said. “And we’ve seen transfers of Love Field gates to parties that are far less credible than a Virgin America.”

 

In briefing material to the council committee, the city staff indicated that Justice has made its wishes known.

 

“On April 16, 2014, the City received notice from the Department of Justice that American and Virgin America had reached an agreement and that agreement satisfies the Department of Justice,” the briefing paper stated.

 

L.E.K. said that the decision on the gates should be based on what’s best for the “primary stakeholders” — Dallas residents and the local business community. It said its analysis did not include American and the Justice Department.

 

“We have excluded ‘other stakeholder’ considerations from our analysis in order to remain objective; the DOJ’s needs do not necessarily overlap with the needs of the primary stakeholders,” the L.E.K. report said.

 

The consultants said Southwest likely would add the most destinations and “drive the most passenger traffic” at the two airports. While Virgin America plans 18 daily departures at Love Field, it will take its six departures away from D/FW Airport. The report also raised the question of whether Delta’s 22 flights at Love Field would cannibalize its D/FW operations.

 

It assumed that Delta would operate only 20 flights a day from the two gates, although Delta has scheduled 22 flights.

 

(Terry Maxon - The Dallas News)

Asiana Airlines suspend 767-300 flight deck crew for operating with one engine

South Korean regulators are investigating Asiana Airlines following a 19 April incident in which the crew of a Boeing 767-300 aircraft did not divert after they observed a warning with the aircraft’s port-side engine.

One hour into a Seoul Incheon-Saipan flight, the crew observed a warning light relating to one of the aircraft’s two General Electric CF6 engines, says a statement from South Korea’s Ministry of Land, Infrastructure, and Transport.

The crew reduced the engine’s power, but the warning light remained on. Rather than divert to an airport in Japan, the crew elected to fly on, eventually landing in Saipan four hours later on a single engine.

Maintenance personnel in Saipan later discovered “metal particles” – apparently caused by abrasion – blocking an engine oil filter. According to South Korean official news agency Yonhap, a replacement engine had to be flown to Saipan.

The flight number was OZ603, and there were 253 passengers aboard. The carrier was unable to provide Flightglobal with the aircraft’s registration number.

Flightglobal’s Ascend Online Fleets database shows that the operator has seven 767-300s and one 767-300ERF. The average age of its 767s is 18 years.

A 47-member committee comprising government officials and experts will be assembled to look into the incident.

The Yonhap report adds that the two pilots involved in the incident have been suspended pending the outcome of the investigation.

The incident will raise further questions about the competence of Asiana’s flight crews following the crash of an Asiana Boeing 777-200ER while attempting to land in San Francisco on 6 July 2013. Investigators later attributed this crash to pilot error.

(Reuters)

Frontier announces new carry-on bag fees

Bargain hunters could find themselves paying more to fly after Frontier Airlines, a low-cost carrier, on Monday said it would start charging extra for carry-on bags.

The Denver-based carrier said it simplified its price structure and cut its lowest economy fares by 12 percent. But customers taking advantage of the lower fares will now pay $20 to $50 more for a carry-on bag to store in the overhead bin, depending on whether the traveler books online or pays at the gate. Customers can carry on one personal item at no charge.

Prior to Monday's announcement, Frontier charged a carry-on fee for consumers who purchased on third-party websites.

Those who buy an economy fare will also have to pay additional fees for seats near the front of the plane and with more leg room. Those charges start at $3.

The new fees are "very consumer unfriendly no matter how they try to spin it," said Brian Kelly, founder of ThePointsGuy.com, a website that focuses on frequent-flier issues. "Booking Frontier is likely going to cost you more."

Frontier travelers who buy the fully refundable and higher-cost Classic Plus fares are allowed one free carry-on and one free checked bag and also incur no seat fees.

Frontier, which flies to more than 75 cities in the United States, Costa Rica, the Dominican Republic, Jamaica, and Mexico, said in a statement that the "unbundled" economy airfare will allow customers to save by paying only for services they want.

In making the changes, Frontier is taking a page from Spirit Airlines, the Miramar, Florida-based carrier known for low base fares and extra charges for many other options.

Denver-based Frontier was purchased from Republic Airways Holdings (RJET.O) last year by private equity firm Indigo Partners LLC, whose co-founder William Franke is a former Spirit Airlines chairman. Last week, Frontier said Barry Biffle, a former executive vice president of Spirit, had been named its president.

"Spirit is known as an airline that will nickel-and-dime you and they're proud of it," Kelly said. "Frontier is not."

(Reuters)

Alaska Airlines 1st quarter results double over last years

Alaska Airlines 737-890 (35191/2560) N594AS rotates from Rwy 19R at John Wayne Orange County Airport (SNA/KSNA) on April 20, 2014.

(Photo by Michael Carter)

Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported $94 million net income for the first-quarter, more than doubling the $37 million net income reported in the year-ago period.

Excluding the impact of mark-to-market fuel hedge adjustments of $5 million, the company reported a first-quarter “record” net income of $89 million, compared to $44 million in 2013.

Revenue increased 7.9% year-over-year to $1.22 billion as operating expenses came to $1.08 billion, up 1.1% from the 2013 March quarter.

Alaska Air Group’s first-quarter mainline traffic grew 3.7% year-over-year to 6.4 billion RPMs on a 4.1% capacity rise to 7.5 billion ASMs, producing a passenger load factor of 85.4%, down 0.3 point from the 85.7% passenger load factor reported in the 2013 first-quarter.

The company reported 4,737,000 mainline passengers for the first quarter, up 4.5% year-over-year from the 4,534,000 passengers carried in the year-ago quarter. Mainline yield rose 3.4% year-over-year to 13.34 cents. CASM ex-fuel grew 1.2% year-over-year to 7.68 cents.

First-quarter regional operating results—reflecting the performance of Alaska Air Group subsidiary Horizon Air and third-party carriers—included an 8.2% year-over rise in traffic to 675 million RPMs.

Capacity grew 9.9% year-over-year to 857 million ASMs, resulting in a passenger load factor of 78.8%, down 1.2 points year-over-year. There were 1,912,000 passengers for Alaska’s regional carriers in the first quarter, up 5.5% year-over-year from 1.812,000 passengers in the March 2013 quarter. Regional yield fell 5.4% year-over-year to 27.53 cents.

In January, Alaska Airlines firmed an order for two Boeing 737-900ER aircraft, a transaction worth $192 million at current list prices. During the same month, the carrier took delivery of its 100th 737 NextGen aircraft.

(Mark Nensel - ATWOnline News)

jetBlue flight attendants look to unionize

Flight attendants at JetBlue Airways are pushing for a vote on whether to unionize, marking a second organizing effort at the formerly non-union airline after pilots authorized joining a union on Tuesday.

The flight attendants are working with the Transport Workers Union of America (TWU) to sign authorization cards that would let them hold an election under national labor rules, the TWU told Reuters.

"We're getting them in very quickly," Thom McDaniel, a TWU International vice president, said of the cards.

JetBlue said it was aware of union drives by flight attendants, but the company believed the effort was still in its early stages.

"We're not aware of a mature effort," spokeswoman Jenny Dervin said. "We know that unions and some people within the companies are very interested in bringing unions in."

The TWU said a drive last year came within about 250 cards of the amount necessary to force a vote. McDaniel said he is confident that the union can obtain enough cards in the next few months to call a vote by the end of the year. The union's claims could not be independently verified.

The campaign was relaunched in January, McDaniel said, after a previous drive, which began in October 2012, ran up against a card-expiration deadline. Under labor rules, authorization cards expire after 12 months.

If the drive succeeds, about 4,000 JetBlue flight attendants would join 2,600 JetBlue pilots who agreed on Tuesday to be represented by the Air Line Pilots Association, ending JetBlue's status as a non-union carrier.

Some 71 percent of the pilots eligible to vote backed the plan to unionize, ALPA said on Tuesday.

JetBlue stock fell about 4 percent on Tuesday after the announcement. It closed on Thursday at $8.37, down 2.6 percent.

Under labor rules, employees can authorize a vote if 50 percent of the group plus one person sign authorization cards.

JetBlue said such a "tipping point" appeared far off.

"We're not aware that we're anywhere close to that kind of scenario," Dervin said.

JetBlue reported a $4 million profit for the first quarter on Thursday. Chief Executive Officer David Barger said the airline sees no material change in its financial outlook as a result of the pilots' vote.

JetBlue pilots recently received a 20 percent raise, and the time to negotiate a new contract could be 32 months, Barger added.

The TWU's McDaniel said flight attendants are concerned about job losses in a merger, pay that they say is near the bottom of the industry and work rules that are not consistent.

Dervin said the crew members are covered by rules providing severance if the company changes hands, that pay is on a par with peers and that flexible working rules are developed with input from a committee that includes flight attendants.

One worker at the airline said many flight attendants are concerned about these issues, however, and the support for the union was strong.

"Flight attendants are ready for a union," said one flight attendant, who spoke on condition of anonymity out of fear of being fired. "I have a feeling it's going to go the same way as the pilots."

(Alwyn Scott - Reuters)

Southwest Airlines reports huge 1st quarter earnings

Southwest Airlines 737-7H4 (27894/885) N406WN departs John Wayne Orange County Airport (SNA/KSNA) on August 29, 2011.

(Photo by Michael Carter)

Southwest Airlines earned first-quarter net income of $152 million, a significant improvement over a net profit of $59 million in the prior-year period, and expects continued strength throughout 2014.

The Dallas-based airline has long targeted a 15% return on invested capital (ROIC) goal, a mark it routinely hit in previous decades but has struggled to achieve in recent years even as it maintained profitability. CFO Tammy Romo told analysts and reporters that after “a very strong first quarter … we’re close to our 15% ROIC goal and we plan to hit it this year.” CEO Gary Kelly added, “There are no airlines that have hit a 15% return on invested capital over a cycle except for Southwest Airlines. That’s what we did in the 1970s, ‘80s and ‘90s … We’ve worked very hard for a decade to get back to this point.”

Southwest’s ROIC for the 12 months ended March 31 was 14.2%, which compares favorably to ROIC of 8.3% for the 12 months ended March 31, 2013.

Despite the encouraging financial performance, Southwest plans to keep capacity flat for the full-year 2014 as it completes the integration of AirTran Airways, which it acquired in 2011. Kelly said Southwest will contemplate growth opportunities next year. “We want to grow, but we’re cautious,” he said, adding that “our first priority” is hitting the 15% ROIC goal.

Southwest’s fleet stood at 676 aircraft as of March 31, five fewer than it had at the end of 2013. During the first quarter, it took delivery of two new Boeing 737-800s and six pre-owned 737-700s. It retired one 737-300 and removed 12 AirTran 717-200s from service.

“This is a very tactical business, especially when it comes to growth and growth strategies,” Kelly said, adding, “We’ll want to manage our growth very carefully with an eye to keeping our balance sheet strong and hitting our return on invested capital.”

Southwest’s first-quarter revenue increased 2% year-over-year to $4.17 billion while expenses decreased 1.6% to $3.95 billion, producing an operating profit of $215 million, more than tripling operating income of $70 million in the 2013 March quarter. The carrier estimated severe winter weather cost it $45 million in revenue during the first quarter.

Southwest’s traffic grew 1.7% year-over-year in the first quarter to 24.16 billion RPMs on a 1.1% cut in capacity to 30.47 billion ASMs, producing a load factor of 79.3%, up 2.2 points. Yield improved 0.7% to 16.28 cents.

(Aaron Karp - ATWOnline News)

UPS 1st quarter results slightly lower than previous year

UPS 767-34AF(ER) (37947/1024) N349UP smokes the mains on Rwy 30 at Long Beach Airport (LGB/KLGB) on July 9, 2013.

(Photo by Michael Carter)

United Parcel Service (UPS) reported first-quarter net income of $911 million, down 12.2% from a net profit of $1.04 billion in the prior-year quarter, as earnings were hit hard by severe winter weather in the US.

In the US domestic market, which accounts for the majority of UPS’s business, “the company experienced lost revenue and additional cost as a result of significant network disruptions on more than half of the operating days during the quarter,” UPS stated. “Overtime wages, purchased transportation and snow removal costs increased substantially over the prior year.”

UPS’s first-quarter domestic package operating profit dropped 14.6% year-over-year to $927 million and the company’s overall operating profit declined 4.2% to $1.51 billion. “Unusually harsh weather weighed on operating profit by approximately $200 million, due to increased expenses and slower revenue growth,” UPS said.

CFO Kurt Kuehn added, “During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather.”

UPS chairman and CEO Scott Davis noted UPS was not alone: “Much of the US economy was negatively affected by the severe weather conditions in the first quarter.” He told analysts and reporters that this further hurt the company’s business, saying, “We saw business-to-business shipments slow as manufacturers, distributors and retailers closed shop on many days owing to weather conditions … The good news is spring has arrived.”

UPS experienced strength in its air-intensive international package business, which posted a 24.4% year-year-over first-quarter operating profit gain to $438 million on a 5% rise in revenue to $3.13 billion. “Our international export volume was 7.7% higher, with Europe leading the way,” Kuehn said.

Overall company revenue rose 2.6% year-over-year in the first quarter to $13.78 billion.
Kuehn said UPS is “encouraged by the positive trends in our business” and expects an improved performance in the final three quarters of 2014 with the challenges posed by winter weather behind it.

Looking at the full-year outlook, Davis said, “The macro-economic environment looks decent as we move forward. Both the global GDP and US GDP will be a little better than they were last year. Not robust, but better than they were a year ago.”

(Aaron Karp - ATWOnline News)

Allegiant Air post positive 1st quarter results

Allegiant Air 757-204(WL) (26963/450) N901NV taxies at Las Vegas McCarran International Airport (LAS/KLAS) on December 16, 2012.

(Photo by Michael Carter) 

Las Vegas-based Allegiant Travel Co., parent of Allegiant Air, reported first-quarter net income of $34 million, up 7% from $31.8 million in the year-ago quarter.

Total operating revenue was up 10.8% to $302.5 million, while expenses climbed 11.2% to $245.3 million, producing an operating income of $57.3 million, up 9.4% year-over-year.

Chairman and CEO Maurice Gallagher said that “significant operational challenges and unusually high one-time costs impacted our overall financial performance. This was a very difficult operational quarter as we navigated through significant flight crew availability issues stemming from external factors that occurred last year.”

Scheduled traffic during the quarter rose 9.6% to 2.06 billion RPMs on an 11.3% increase in capacity to 2.33 billion ASMs, producing a load factor of 88.5%, down 1.3 points compared to the first quarter of 2013. Yield rose 3.1% to 9.88 cents.

During the first quarter, the company integrated Airbus A320 aircraft into scheduled operations, ending the quarter with three A319s and seven A320s. According to a company statement, it also integrated two McDonnell Douglas MD-80 aircraft configured with 166 seats to the fleet in March, ending the quarter with 53 166-seat MD-80s. It also completed the reconfiguration of its Boeing 757 fleet from 223 seats to 215 seats and added six “Giant Seats” per aircraft.

(Linda Blachly - ATWOnline News)

American Airlines reports 1st quarter results

American Airlines MD-82 (49256/1158) N244AA arrives at Long Beach Airport (LGB/KLGB) when the carrier still served the airport.

(Photo by Michael Carter) 

American Airlines Group, parent of merging carriers American Airlines and US Airways, reported net income of $480 million for the three months ended March 31—the first reporting period for the combined entity.

The net profit reverses a combined net loss of $297 million in the 2013 first quarter, comprising a $341 million net loss for standalone American and a $44 million net profit for standalone US Airways.

In its earnings report released Thursday, American revealed it received $381 million in cash for the sale of slots at Washington National (DCA) and New York LaGuardia (LGA) airports that were mandated by the US Department of Justice. It said it gained $137 million in net special credits “primarily” from the sale of the DCA slots “offset in part by integration and merger related expenses.”

The new American reported revenue of $10 billion for the three months ended March 31, up 5.6% over the combined revenue of American and US Airways in the 2013 March quarter. First-quarter expenses decreased 0.3% year-over-year on a similar basis to $9.27 billion, producing an operating profit of $730 million, a more than four times improvement over a combined operating profit of $173 million in the year-ago period.

American Airlines Group said the operations of American and US Airways have been joined at 58 airports, including American’s Miami hub and US Airways’ Phoenix hub.

Combined American/US Airways first-quarter mainline traffic rose 1.8% year-over-year to 45.83 billion RPMs on a 2.7% increase in capacity to 56.83 billion ASMs, producing a load factor of 80.6%, down 0.7 point. Yield improved 4.7% to 15.84 cents.

(Aaron Karp - ATWOnline News)

United Airlines reports 1st quarter loss

United Airlines A320-232 (c/n 1495) N475UA sporting the carriers special 85th anniversary retro livery "Stars & Bars" rolls into gate 12 at John Wayne Orange County Airport (SNA/KSNA) on October 16, 2011.

(Photo by Michael Carter)

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.”

In the second quarter, United will launch nonstop service between San Francisco and Chengdu, China, representing “the second phase of United’s Pacific strategy, which focuses on secondary Asian cities.”

(Mark Nensel - ATWOnline News)

jetBlue reports 1st quarter results

jetBlue Airways A320-232 (c/n 2160) N586JB "I Love New York" taxies to Rwy 30 at Long Beach Airport (LGB/KLGB) on April 27, 2011.

(Photo by Michael Carter)

JetBlue Airways posted a first-quarter net profit of $4 million, down 71.4% from net income of $14 million in the year-ago period. CEO Dave Barger blamed the profit decline on a “really tough first quarter” in terms of severe winter weather in the US northeast.

JetBlue canceled 4,100 flights in the March quarter owing to weather, costing the carrier $50 million in revenue and reducing operating income by $35 million.

Barger told analysts and reporters the carrier expects its performance to improve over the remainder of 2014.

He said JetBlue is focused on the debut of Mint, its new premium US transcontinental product—which will feature lie-flat seats and personal “suites” on New York JFK-Los Angeles Airbus A321 flights starting in June—and is seeking to carve out a third business model between “super discounters” and traditional network carriers. “We look at playbooks from both of those models” in forming JetBlue’s strategy, Barger said.

JetBlue reported first-quarter revenue of $1.35 billion, up 3.8% year-over-year, while expenses increased 5.5% to $1.31 billion. Operating income was $41 million, down 30.5% from an operating profit of $59 million in the 2013 March quarter.

JetBlue’s first-quarter traffic rose 1.8% to 8.66 billion RPMs on a 2.7% increase in capacity to 10.42 billion ASMs, producing a load factor 83.1%, down 0.8 point. Yield rose 1.8% to 14.2 cents.

(Aaron Karp - ATWOnline News)

Bizjets could see data revolution in the cockpit and cabin predicts Honeywell

Honeywell believes that improved data connectivity for business aircraft will have a major impact in both the cockpit and passenger cabin.

“Technology allows you to contemplate how to do things more efficiently for both pilots and passengers,” says Andy Gill, Honeywell senior director Asia-Pacific business and general aviation.

“It’s really bringing us to an area that allows us to think about what are the things we can do, what are the benefits from getting data on and off an aircraft at the speeds now possible.”

Flightglobal spoke with Gill at last week’s ABACE industry gathering in Shanghai.

Gill says that within a few years, improved connectivity should allow passengers aboard business jets to stream extensive data, such as that required for high-definition video conferencing.

The cockpits of business jets will also benefit, for example being able to update databases and flight plans during flight. Gill adds that business jets could one day also share radar data, allowing one aircraft to benefit from a radar set aboard another aircraft – similar to how military aircraft share sensor data.

“Dispatch reliability can be improved through having more data,” he says. “If you know more data is coming off the aircraft about its health, you can do some predictive analysis as to what issues might arise in the aircraft. But if you transmit a full picture about what’s happening on that aircraft, you can get a better sense of the health of the aircraft and position spares and that type of thing.”

Improved connectivity will also make it easier for the mission software aboard aircraft to be loaded when an aircraft is on the ground.

Gill is also optimistic about China’s opening of airspace. He says the Chinese government is “working very hard” on opening up low level air space, which could give general aviation in the country a significant boost from 2018 onwards.

(Greg Waldron - Flightglobal News)

Boeing reports 1st quarter profit

Boeing’s increased rate of commercial jet manufacturing is starting to pay off for shareholders.

In the first three months of this year, 161 new airplanes rolled off the company’s assembly lines — more jets than the same period last year. That increased rate contributed to a $965 million profit for Chicago-based Boeing Co. post in the first quarter.

The net income was actually down 12.7 percent from last year’s $1.1 billion first quarter profit, but that is because Boeing took a $330 million accounting write-off related to changes in its retirement plans. The company also noted that its 2013 earnings were inflated by a one-time research and development tax credit.

Net income per share dropped to $1.28 per share from $1.44 during last year’s first quarter. But adjusted to exclude the write-off, earnings were $1.76 per share, beating the estimate of $1.56 per share from Wall Street analysts surveyed by FactSet. Shares rose $2.38, or 1.9 percent, to $129.93 in midday trading.

The company reported $20.47 billion in revenue, more than the $20.15 billion expected by Wall Street. That’s up 8 percent from the $18.9 billion in revenue during the same period last year.

Revenue at Boeing’s commercial plane unit rose 19 percent. The business grew thanks to increased production rates on its 737 manufacturing lines. In April, the 737 program reached a production rate of 42 per month. Boeing hopes to increase that to 47 airplanes a month in 2017 to help feed a worldwide demand for the narrow-body jet.

The company’s much delayed 787 Dreamliner also showed progress, reaching a production rate of 10 per month — although only 18 were delivered during the first quarter. Still, that’s a major improvement over last year, when only one Dreamliner was delivered due to a worldwide grounding of the fleet over concerns about its lithium-ion batteries catching on fire.

Boeing has backlog of 5,100 airplanes on order with a combined book value of $374 billion.

On the defense side, revenue fell 6 percent and Boeing lowered its full year revenue guidance for military aircraft to $14.2 billion, down from $15 billion. Its global support and services revenue is expected to climb, however, from $7.8 billion to $8.6 billion. Both changes reflect a realignment within the defense unit.

Boeing also repurchased 19.4 million shares for $2.5 billion during the first quarter.

(Associated Press)

As they grow - are Southwest Airlines and jetBlue leaving employees behind?

JetBlue and Southwest Airlines are starting to look less like innovative upstarts -- complete with low fares and unusual perks -- and more like their stodgy competitors. As they age, they may have less room to treat workers well, and employees are starting to respond.

JetBlue’s pilots voted to unionize Tuesday, ending the airline’s status as the biggest U.S. carrier without organized labor groups. The airline, known for its friendly staff, TVs at every seat and cheap fares, is mirroring the legacy carriers more closely as it increases in size, expands its fleet and introduces plans for a premium cabin on lucrative routes between New York and Los Angeles and San Francisco. The vote for the union, which came after two previous decisions to reject unionization, shows pilots don't want to be left behind as the company expands.

“The unionization of the pilots at JetBlue may signal the blurring of the distinction between the legacy carriers and the low-cost carriers, which have made profits by having direct flights and also by having lower wage structures,” said Gary Chaison, an industrial relations professor at Clark University. “The legacy carriers have essentially said, 'We're going to cut costs no matter what,'" Chaison said. As a result, JetBlue, Southwest and other discount carriers have lost some of their ability to undercut more established competitors.

Southwest Airlines, JetBlue’s big brother in the discount carrier space, is going through similar growing pains. The company will soon begin flying internationally, and, in a classic big airline move, it merged with AirTran in 2010. Southwest is now in the midst of labor negotiations with the union that represents its baggage handlers, ramp agents and other employees -- negotiations that some are calling the most tense in the airline's history.

While Southwest officials acknowledge that changes in travel preferences have pushed the company to change its business model a bit, they say that hasn't jeopardized the company's employee-first culture. Brandy King, a Southwest spokeswoman, wrote in an email to The Huffington Post earlier this month that this round of contract negotiations isn't necessarily more tense than in previous years, but given that most other airlines filed for bankruptcy or went through some kind of restructuring in the mid-2000s, Southwest's contracts are far more generous than those of their competitors, "making it difficult to remain a low-cost carrier."
 
"The industry has changed drastically over the last decade, and we are working to adapt our workforce to the new way of flying," King wrote.
 
The two airlines have grown substantially over the past couple of years -- JetBlue is now the fifth-largest U.S. carrier, and Southwest has moved beyond offering just point-to-point service between smaller airports -- putting their famous folksy cultures at risk. One of the major sticking points in Southwest's contract negotiations is a corporate interest in adding more part-time employees.

The company argues more part-timers would allow it to more effectively compete with most other airlines that already have a larger part-time workforce. Union organizers say the move would bring in workers less interested in "career" jobs and less invested in the company's future.

Not having a union representative at the table may have put JetBlue pilots at a disadvantage already. The company’s pilot compensation package comes in below many competitors' totals, according to data from KitDarby.com, an aviation consulting firm. In January, JetBlue struck an agreement with its pilots aimed at fixing that discrepancy, agreeing to raise the base rate of their pay by 20 percent over the next three years.

Given that the airline posted record profits last year, JetBlue’s pilots likely wanted a fairer share of the pie, said John Budd, a labor relations expert at the University of Minnesota. The decision to unionize might change the company's cost structure, he said, but it "shouldn’t make them an anomaly in the industry."

“We see this not only in the airlines, but in lots of industries,” Budd said. “You join a little startup, it’s informal, people are looking for something exciting, probably working really hard, but you feel like you’re a part of something new and fresh. But you start to get bigger and things become more formal, less personal, you start to look like the other players in the industry.”

Being bigger also means it’s harder to win customers. Both Southwest and JetBlue made names for themselves by undercutting competitors with cheaper fares. In response, so-called “legacy” carriers cut their fares, too. Now there’s less room for the discount airlines to grow.

With Southwest and JetBlue looking more like other airlines with more routes, fewer rock-bottom prices and older workers, the companies are becoming more susceptible to things that typically plague the industry: fuel price spikes, economic downturns, and the cost of taking care of an aging workforce. Now that those concerns are becoming more a factor, JetBlue’s pilots are joining together to protect themselves, Chaison said.

“Essentially the pilots are saying, ‘We are the most highly paid people, management looks at us as a labor cost with very deep pockets, so when the hard times come we want to be at the table,’” he said.

(Jullian Berman - The Huffington Post) 

SoCal Boeing employees win huge arbitration award

After a 14-year legal battle with Boeing Co., nearly 500 current and former engineers and technical workers will get a slice of a $47 million arbitration award from the aerospace company for work that fell under an engineering contract.

The workers will receive an average award of about $97,000 from Boeing for their work at Edwards Air Force Base or at a Boeing facility in Palmdale from 2001 to the present if they are or were represented by the Society of Professional Engineering Employees in Aerospace IFPTE Local 2001.

Boeing had denied union representation to a handful of employees working jobs the union contended were covered by union contracts and withheld the disputed pay.

Of the 484 employees, 30 are from Long Beach, the union reported Wednesday. Union representatives held an informational session at the Long Beach Hyatt at the Pike on Wednesday afternoon that drew a handful of workers.
 
A Boeing employee who declined to give his name said he found out on Saturday about the arbitration award.

“It’s all a shock,” he said. “Who expects to get something like this? For many of these guys, it’s life changing.”

The arbitrator, who made the ruling in January that was not reported until this week, said the workers are entitled to wages and benefits for Boeing work covered under the SPEEA contract, according to the union.

Rich Plunkett, the director of Strategic Development for SPEEA, said he was glad to see the years he put in to secure the multimillion-dollar arbitration finally come to fruition.

“It’s not just about the money. It’s getting what you were owed and doing right by employees who generate profit for Boeing,” he said.

Tim Healy, labor communications spokesman for Boeing, said the company was disappointed in the arbitrator’s decision siding with SPEEA, which maintained that the contract language should extend to the majority of engineers in California, including those who had been added over the years because of mergers. The company argued that those who were added should be able to vote on whether they wanted to be represented by SPEEA.

“We’re disappointed that the arbitrator ruled against Boeing, but we’re working with SPEEA to fulfill this ‘make work’ award,” Healy said.

The company must fulfill the award by May 21, he said.

Several current and retired employees who showed up to SPEEA’s informational session on Wednesday said they were pleasantly surprised to be notified by mail of their back pay, which ranged from a few dollars to more than $400,000.

For Riverside resident James Thornell, who retired from Boeing after suffering a major stroke, the arbitration award comes as his long-term disability money runs out in May.

“We had been living off of that money and it ends next month, and we didn’t even know about this and we just found out about it,” he said. “We lucked out.”

(Karen Robes Meeks - Long Beach Press Telegram) 

Four Seasons Private Jet

If you are looking for the lowest fare for an around-the-world trip, booking flights on Priceline.com and hotels on Trivago.com may be your best bets. If you have a taste for luxury that is not easily satisfied, check out the new Four Seasons Private Jet Experience.



Beginning in February 2015, the Four Seasons Jet will transport 52 guests on bespoke journeys, offering discerning travelers a distinctly Four Seasons travel experience from the moment they book their trip. Four Seasons in-flight staff, including a dedicated on-board concierge, will coordinate with local Four Seasons concierges in each destination to ensure that the Four Seasons Private Jet Experience is nothing short of extraordinary.



This marks the hospitality industry’s first fully branded private jet. What could be better than globe-trotting from one Four Seasons Hotel to another? Why getting there on a Four Seasons Boeing 757 of course!



“Taking our legendary service to the skies is a natural extension of what we’ve been doing in our hotels for more than 50 years,” says Susan Helstab, Executive Vice President Marketing, Four Seasons Hotels and Resorts. “The Four Seasons Jet showcases the unforgettable people and experiences that make Four Seasons unique. It speaks to our pioneering spirit and the aspirations of today’s modern luxury traveller in an imaginative new way.”

Reservations are now being accepted for the following Four Seasons Private Jet Experience trips:
Reservations aboard the new Four Seasons Jet are currently open for the following trips:

Around the World, February 2015 – Beginning in Los Angeles and concluding with a celebratory dinner in London, this 24-day, 9-destination journey explores dynamic cities, exotic islands, architectural wonders and awe-inspiring natural environments. Highlighted by an only-by-private-jet stop at the Taj Mahal, all accommodations will be at Four Seasons hotels and resorts.

Backstage with the Arts, April 2015 – In the company of like-minded travellers who share a passion for the arts, guests will visit six cities and spend 16 indulgent days filled with backstage visits to Europe’s most stunning museums, outstanding performances at Teatro alla Scala in Milan and the Estates Theatre in Prague, exquisite dinners and a private gala in the Pavlovsk Palace outside St. Petersburg.

Around the World, August 2015 – Epic is the word to describe this globe-circling expedition through nine destinations, including stays in three of the newest Four Seasons hotels, plus the brand’s very first safari lodge in the Serengeti. From the Forbidden City in Beijing to the medina in Marrakech, the pristine waters of the Maldives to the excitement of the world’s largest fish market in Tokyo and a final, glittering dinner in New York, it will be 24 days no one will ever forget.

Each journey includes air travel and ground transportation, planned excursions, all meals throughout the trip and luxurious accommodations exclusively at Four Seasons.

(Gailen David - Savvystews.com)

The most friendly and most unfriendly F/A's in the sky!

**I found this story very interesting and what a surprise the airline I work for tied for first place with having the friendliest flight attendants.....go figure!

(Michael Carter - Editor APF)

You're probably not going to be terribly surprised by the results of the latest Airfarewatchdog.com reader poll.

The truth is, at least in my experience, most flight attendants are "nice" at least if you're nice to them. Pour on the charm, and they'll respond. That's not always the case, but here are some tips.

We polled 3,400 people, and by a wide margin, Southwest and Alaska were voted as having the nicest flight attendants and Spirit the worst, followed by Air Canada. We adjusted the results by the number of passengers carried between January and October 2013 in order not to skew the results based on airline size (the more people who fly an airline, the more flight attendants they encounter).

The results of the worst flight attendant poll:

Spirit - 26%

 Air Canada - 14%

 Frontier - 11%

 Virgin America - 9%

 Allegiant - 8%

 United - 7%

 US Airways - 7%

 American - 5%

 AirTran - 3%

 Delta - 3%

 Hawaiian - 3%

 JetBlue - 3%

 Alaska - 1%

 Southwest - 1%

Since most people seem to love Virgin America (and it is indeed a pretty cool little airline) you might be surprised as I was that it came in 4th in the worst poll, even worse than tiny Allegiant.

As I've noted elsewhere, I never have problems with flight attendants because I treat them with excessive courtesy but the only time I had a really bad one was in first class on Virgin America. The dude just went AWOL and when he finally showed up at the end of the flight I asked what happened, "Where'd ya go, was there an emergency back in coach?" he said "Is there a problem? That's what the call button is for."

Maybe he knew I had upgraded my $150 fare with a last minute $350 upgrade and wasn't entitled to a second drink.
 
Harrumph.

(George Hobica - Airfarewatchdog.com)