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Continental Wins US Postal Contract September 26, 2006

Posted by Andrew in Commercial Aviation, Continental, Uncategorized.
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This morning, legacy carrier Continental Airlines was awarded a US Postal Service contract valued at $258 million. The agreement, which makes Continental the second largest passenger carrier that also carries mail, will last for five years. Continental, along with many other carriers, has begun to diversify and implement alternative ways to generate revenue in addition to carrying passengers. The latest contract is seen by some analysts as a reward for Continental, which has been carrying mail for the USPS for the past seventy-two years.

Source: Reuters

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Lufthansa Places Order for Airbus Aircraft September 20, 2006

Posted by Andrew in Airbus, Boeing, Lufthansa, Uncategorized.
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German carrier Lufthansa announced this morning that it hard ordered both long-haul and short-haul aircraft from Airbus, with deliveries beginning in the coming months. As a stopgap measure, Lufthansa will receive five A330 aircraft over the next two years to make up for delays in the A380 program. In addition, the carrier is taking on ten short-haul A320 and fifteen A321 aircraft. The order for the A320 and A321 serves to both replace aging aircraft and bolster the size of the fleet. Still, Lufthansa management left open the possibility for an additional thirty commitments to the A320 family. Even with the recent order, Lufthansa may still make a substantial order for more long-haul aircraft. According to industry sources, Lufthansa management is contemplating the purchase of up to one-hundred aircraft in the coming months. With today’s order only accounting for one-third of that maximum number, could a larger Boeing or Airbus order be in store?

Source: Reuters

Russian Mogul Salvages Aeroflot-Boeing Order September 19, 2006

Posted by Andrew in Uncategorized.
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Facing the collapse of a three-billion dollar order between Aeroflot and Boeing, Alexander Lebedev, a man with a thirty-percent stake in the Russian carrier, took matters into his own hands this morning. Rather than risk the implosion of the deal, Mr. Lebedev signed a deal to purchase twenty-two long range aircraft on behalf of Aeroflot, floating his own assets as collateral. Aeroflot faced a Boeing imposed deadline on whether to select either the Boeing 787 or the Airbus A350 XWB. The board of Aeroflot’s refusal to make a commitment to either aircraft posed a problem for both Boeing, which is fast selling out of production slots of its twin-engine, 787 aircraft. With Boeing unwilling to reserve slots for any longer, Aeroflot risked losing the earlier production slots if it did not make a formal commitment by the agreed upon date. Boeing refused to comment on the order– only confirming that a deal had occurred. Lebedev’s company reportedly “signed the deal to keep Aeroflot’s options open in case the airline’s full board eventually decides to buy the Dreamliner.” Still, some analysts are skeptic of board approval for the order. In recent months, Russian interests have purchased a significant stake in the parent company of Airbus. Could a sole Airbus A350 XWB order be a way of furthering Russian influence over the predominantly European Airbus? For now, Ledebev begs to differ.

Source: Reuters

Northwest Airlines Flight Attendants Barred from Strike September 15, 2006

Posted by Andrew in Commercial Aviation, Northwest.
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A federal judge ruled today that Northwest flight attendants may not strike or take other actions to disrupt the carrier of the service until a final decision is made by the bankruptcy court. Northwest’s 7300 flight attendants, represented by the Association of Flight Attendants, promised to appeal the decision. In reaction to the decision, Northwest management released a statement, saying that “(It) allows our customers to continue to book Northwest Airlines with confidence… We [still] remain committed to negotiating a consensual agreement with our flight attendants.” Northwest attendants don’t have such a rosy outlook, as the union representing them maintains that there is “little point in sitting down again with Northwest… [as they’ve] twice rejected tentative agreements with the airline over pay cuts designed to save $195 million a year” because the concessions were too substantial. In legal terms, the conflict about whether to allow the Northwest flight attendants to implement CHAOS (Create Havoc Around Our System) is founded in the Railway Labor Act. The act requires both labor and management to be released from formal meditation before a strike can commence. In a statement, a representative of the Association of Flight Attendants said that this statute unfairly handicaps the union, as Northwest has effectively abandoned negotiation by imposing its terms unilaterally. Historically, debate over the Railway Labor Act is frequently a flash-point of contention in squabbles between labor and management, particularly in the commercial aviation industry. If Northwest management can reach an agreement with its flight attendants for the proposed sum, it will reach the target of labor savings of $1.4 billion needed to exit bankruptcy. As the anniversary of the declaration of bankruptcy by both Northwest and Delta Airlines nears, an exit would be welcome news for investors. Still, the question remains: how much will the unions concede for leaner legacy carriers to exit from the doldrums of bankruptcy?

Boeing Garners More 747-800 Orders September 12, 2006

Posted by Andrew in Boeing, Commercial Aviation.
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The freight carrier Atlas Air announced today that it had signed a deal with Boeing to purchase twelve Boeing 747-800 freighter aircraft. Analysts valued the deal at $3.4 billion in list prices; but the carrier likely negiotated discounts with the aerospace giant as Air Atlas is one of the first airlines to place an order for the 747-800. Air Atlas expects to receive delivery of its first aircraft by 2010, with the final aircraft in this order delivered by the end of 2011. Air Atlas CEO William Flynn praised the plane, which is still under development, saying that “with its increased capacity, greater range at equivalent payloads, and lower operating costs, the 747-8F gives our customers a cutting-edge aircraft to meet this growth in global air cargo demand. We are very pleased at our customers’ enthusiasm for this next-generation freighter, and we look forward to putting it into service for them.” The selection of the newest generation of 747 aircraft was a a natural choice for the carrier, as Air Atlas currently operates the world’s largest fleet of freight 747 aircraft. The Boeing 747-800 aircraft, which comes in two iterations– passenger and freighter, owes its increased efficency primarily to “General Electric’s new GEnx engines, which deliver greater fuel efficiency, engine durability, weight reduction and lower overall operating costs than today’s engines.” With this order, Boeing has sold thirty 747-800 aircraft. All of the purchased aircraft have been the freighter variant, leaving Boeing to ponder, will the 747-800 passenger version become as popular as its predecessors?

Source: Yahoo

LAX Activates Memorial in Honor of September 11 September 11, 2006

Posted by Andrew in Commercial Aviation.
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As part of Los Angeles International Airport’s “Gateway LAX Enhancement Project”, the airport authority relit a series of colorful pylons last night. The pylons were originally designed by artist Paul Tzanetopoulos to welcome visitors to the airport, but have taken on a secondary purpose as they now commemorate those who lost their lives on September 11, 2001. According to a press release, the “1.5-mile lineup of 11 translucent, tempered glass columns of increasing height from 25 to 60 feet along Century Boulevard culminates with a ring of 15 100-foot-tall columns at the intersection of Century and Sepulveda Boulevards. Together, with 32-foot-high “L-A-X” letters facing eastward to incoming motorists, the pylons create what is considered the world’s largest permanent, public art light installation.”

Source: Yahoo

Frontier Airlines Signs Deal with Bombardier for Turboprops September 6, 2006

Posted by Andrew in Commercial Aviation.
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Half a decade ago, when jet fuel was cheap, carriers seemed only interested in fast, regional jets. Now, in the era of $70 a barrel petroluem, airlines have rationalized this belief and begun to curtail the use of these inefficient aircraft. Today, Frontier Airlines offered the most substantial sign that turboprops are making a comeback. Frontier signed an agreement with Bombardier, an airplane and train manufacturer, to purchase ten seventy-seat Q400 aircraft. This deal, valued at $250 million in list prices, is a major boost for Bombardier, which has seen the sale of its workhorse Canadair regional aircraft languish as legacy carriers have begun to question their efficiency and safety. Frontier plans to use these ten aircraft to form a wholly owned regional subsidiary that will serve the Colorado and Rocky Mountain region. The unnamed subsidiary will serve eighteen destinations and create jobs for upwards of three hundred employees. The new subsidiary will augment the current regional jet service, operated by Horizon, the regional jet division of Alaska Air. Frontier’s purchase demonstrates that the airline, which is facing growing competition at its hub in Denver with Southwest and United, is making a concerted effort to expand its regional offerings in the Rocky Mountain region.

Source: Reuters

Canadian Carrier CanJet Shutters Doors September 5, 2006

Posted by Andrew in Commercial Aviation, Uncategorized.
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Citing high fuel costs and a turbulent industry, Canadian upstart CanJet will shutdown all scheduled passenger service after September 10. The carrier, which utilized a fleet of ten Boeing 737-500 aircraft, flew to fourteen destinations in Canada and the United States. The Halifax based airline joins a slew of of other Canadian airlines put out of business by much larger carriers in recent years; namely, Air Canada and Westjet. At its peak, CanJet could only garner five percent of the Canadian market. On the shutdown of Canjet, the airline’s CEO, Julie Gossen, said: “Unfortunately, our airline, over the years, has been faced with many uncontrollable challenges within the industry including high fuel costs, continual increases to airport fees as well as increases in competitive capacity on our primary routes.” While the suspension of scheduled passenger service will benefit the two largest players in the Canadian market, travelers in the Atlantic province will particularly miss the carrier. Canjet will continue to serve the Canadian people; only it will morph from its current form into a charter carrier, utilizing some of the aircraft that currently comprise its fleet. On news of the suspension of passenger service, rival low-fare airline Westjet stock rose three percent.

Source: Reuters

On Landmark First A380 Passenger Flight, Airbus Sacks Head of Program September 4, 2006

Posted by Andrew in Commercial Aviation.
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The head of the Airbus A380 program, Charles Champion, did not have the opportunity to enjoy the landmark first passenger flight of the world’s largest aircraft. Amid growing pressure from shareholders, largely due to delays in the A380 program, Mr. Champion was fired. Mr. Champion has now been relegated to the position of advisor, while the former head of the highly profitable A320 program, Mario Heinen, will fill his position. The replacement of Charles Champion is the first in a series of belt-tightening moves expected to be made by the EADS CEO, Christian Streiff. Mr. Heinen must now work quickly to ensure that the weight and electrical issues, which have cost the company two billion in additional expenditures, do not delay the the program any further. Already, the program is one year behind schedule, with the delivery of the first aircraft to Singapore Airlines expected to occur at the end of this year. Perhaps the installation of Mario Heinen, who led the successful single-aisle A320 program, will reinvigorate interest in Airbus’s wide-body family, which has been languishing in terms of sales lately.

Source: Reuters

Parent of Air Canada Begins Spinoff Process September 1, 2006

Posted by Andrew in Commercial Aviation.
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Air Canada parent ACE Aviation Holdings was given approval recently from a Quebec court to hold a shareholder vote on the spinning off of Air Canada and other assets. The holding company plans to raise over $1.8 billion of capital to be distributed to investors. In addition to spinning off Air Canada, ACE is selling the frequent flyer program for Canada’s leading airline. Even so, tax issues are holding up the sale of Air Canada’s frequent flyer program, the Aeroplan Income Fund. ACE management is waiting for the Canada Revenue Agency to make a ruling on whether the revenue from the sale “will be treated as a return on capital rather than a taxable dividend.” ACE appears to be trying to reward shareholders, who have suffered through Air Canada restructuring for the past few years. As part of the airline’s restructuring process, it placed orders for a large number of Boeing 777 and 787 aircraft within the last year. The spinning off of Air Canada and its frequent flier program does not appear to be a loss of confidence in the carrier, but rather an attempt to generate funds for future investment.

Source: Reuters