NewsAmerican Airlines sees drop in 1Q profit on rising fuel prices American Airlines reported a 45.2% year-over-year (YOY) drop in first-quarter net income from $340 million to $186 million as soaring fuel costs overwhelmed an otherwise positive business environment for the Dallas/Fort Worth-based carrier.
LinkSouthwest reports 37% 1Q profit increase; takes 40 737 MAX options Southwest Airlines has exercised 40 Boeing 737-8 options, bringing its total 737 MAX firm orders to 280 aircraft, and plans to retire 40 737-700s as it takes delivery of the additional 737-8s from 2019-2022. The latest MAX orders were announced as the Dallas-based carrier reported a first-quarter net profit of $463 million, up 36.6% from net income of $339 million in the 2017 first quarter. The profit rise was achieved despite revenue increasing just 1.9% year-over-year (YOY) to $4.9 billion as Southwest contended with what CEO Gary Kelly characterized as “overly aggressive discounting” by competitors in many of the markets it serves.
LinkNo signs of fatigue found in ongoing 737 engine checks: SouthwestSouthwest Airlines says ongoing engine fan blade inspections have not turned up any cracks, as an investigation into the fatal 17 April inflight engine failure on a Boeing 737-700 continues. The airline has completed inspections on about 8,500 fan blades since the accident after accelerating those checks, says Southwest chief operating officer Mike Van de Ven on an earnings call.
LinkTechnicians find ‘no imminent safety concern’ with CFM56 engines With about 60% of mandatory inspections done, nothing pointing to a pressing CFM56-7B fleet-safety issue linked to fan-blade failure has turned up, the engine manufacturer reports.
LinkUS travel advocates applaud Pompeo as next Secretary of StateAdvocates for businesses tied to US travel applauded President Donald Trump’s pick to be the next secretary of state, Mike Pompeo, after he was confirmed by the Senate April 26, but said they expect him to keep to positions he testified he supported.
LinkNorwegian posts 1Q net loss on rapid expansion Norwegian Air Shuttle reported a first-quarter net loss of NOK46.2 million ($5.9 million), compared with a net loss of NOK1.5 billion in the year-ago period, helped by a NOK1.9 billion financial gain from reclassification of its investment in bank Norwegian Finans Holding. LCC Norwegian has been expanding rapidly, adding a raft of new destinations and increasing its fleet, but its swift growth has led to rising debt and last month it issued new shares to help fund its plans, warning that rising fuel costs and currency effects would make for a challenging quarter.
LinkAllegiant Air 1Q net profit up 31% on revenue tools, MD-80 retirements Las Vegas-based Allegiant Travel Co., parent of ultra-LCC Allegiant Air, reported 2018 first-quarter net income of $55.2 million, up 31% from $42.2 million in the 2017 first quarter. Operating revenue was $425.4 million, up 12% from the year-ago quarter. Allegiant’s ambitious plan to fast-track the retirement of its MD-80 fleet remains on track, and the associated efficiency gains along with expanded use of revenue management tools has executives bullish on the company’s revenue-generation potential.
LinkLufthansa Group narrows losses in 1Q; Eurowings weighs down profitsLufthansa Group reported a 2018 first-quarter net loss of €57 million ($70.2 million), narrowed from a net loss of €68 million in the year-ago quarter. Group revenue for the quarter was down slightly to €7.6 million, down 0.7% compared to the 2017 1Q. The group said its network airlines—Lufthansa German Airlines, Austrian Airlines and Swiss International Air Lines (SWISS)—“increased their adjusted EBIT margin significantly by 3.2 percentage points to 2.4% in what is traditionally the weakest quarter for all airlines …. However, “these improved earnings were largely offset by significant one-off costs at point-to-point carrier Eurowings from its growth in the context of the airberlin insolvency.”
LinkSouthwest Airlines’ marketing activity ceased following engine failureSouthwest Airlines executives said they do not believe it is yet appropriate to resume television advertising in the aftermath of the April 17 Boeing 737-700 engine failure that resulted in a passenger fatality, conceding this may slow the carrier’s business recovery from a noticeable softening in bookings following the incident. “We are continuing to see some weakness in our bookings and we’re currently running below our pre-accident run rate,” CFO Tammy Romo told analysts and reporters. Southwest executives estimate the carrier has taken a 1% hit in year-over-year second-quarter RASM growth in the aftermath of the incident, and are unsure how long it will take to recover.
LinkAir France faces more pilot strikes in MayAir France pilot unions have announced a further four days of strike action on May 3, 4, 7 and 8, adding to delays and disruption as workers and management are locked in conflict over pay. The announcement came on the same day as a staff-wide consultation—Air France-KLM CEO Jean-Marc Janaillac’s bid to bring an end to the conflict—opened for all employees to give their views via electronic vote on a pay proposal put forward by management, but rejected by unions.
LinkVietnam Airlines sees strong 1Q profit on demand growthVietnam Airlines has achieved strong profit growth in the three months through March 31, with its performance exceeding projections for the period. The parent carrier achieved a pre-tax profit of VND875 billion ($38.4 million) during the first quarter, which was up 30% year-on-year and 13% higher than its target. The group, which also includes LCC Jetstar Pacific and regional carrier VASCO, recorded a pre-tax profit of VND1.5 trillion. The group total was 6.2% higher than its plan for the period.
LinkUnited Airlines set to open second Polaris loungeUnited Airlines marks the next major milestone in its Polaris-branded customer experience initiative on April 30 with the opening of its new international business-class lounge at San Francisco International Airport (SFO). Polaris, the carrier's international premium cabin service, has two primary elements: dedicated lounges and the on-aircraft features, including a revamped cabin and special amenities. The amenities are rolling out, while United has retrofitted about a quarter of the 82 Boeing 777s and 767s in line for the upgrades, according to the carrier’s website. Most of these are 777-300ERs (14) and 767-300ERs (7), while one of 55 777-200s have been completed. The carrier has not announced plans to upgrade its 787s.
LinkAir New Zealand taps Hi Fly A340 to fill 787 gapAir New Zealand will wet lease an Airbus A340 from Portuguese carrier Hi Fly owing to issues with the Rolls-Royce Trent 1000 afflicting its Boeing 787-9 fleet. “We have been investigating a range of charter options to minimise customer impact as we work through the challenges created by the Rolls-Royce Trent 1000 issue,” says Air NZ. “We have secured one Hi Fly A340 on a wet lease basis for a period from mid-May.”
LinkIranian carriers tentatively sign for 'Russified' SuperjetTwo Iranian carriers, Iran Aseman Airlines and Iran Airtour, have reached preliminary agreements to acquire a modified version of the Sukhoi Superjet 100. The memoranda of understanding, reached during the Eurasia air show in Antalya, each cover the delivery of 20 aircraft.
LinkNorwegian looks to shift 140 jets to new leasing armNorwegian is aiming to divest up to 140 aircraft, including Airbus jets, into a planned spin-off leasing operation, although the company has yet to decide on the structure of such a venture. The airline had previously disclosed that it was exploring options for selling an interest in its leasing arm Arctic Aviation Assets.
LinkRussia's S7 confirms interest in up to 75 shrink SuperjetsRussia's S7 Group has been confirmed as the first potential customer for a shrink version of the Sukhoi Superjet 100. FlightGlobal had previously revealed that S7 Group had been working on technical requirements for the 75-seat aircraft – tentatively named the Superjet 75 or SSJ75.
Link China's Ctrip invests in Boom SupersonicChina’s leading online travel agency Ctrip has concluded a strategic investment in Boom Supersonic. The Chinese company would not disclose the “amount and range” of its investment, except to say that Boom has so far raised $85 million, including seed investment, venture capital and investments from strategic partners.
LinkRolls-Royce partners with Airbus for UltraFan flight testsRolls-Royce will co-operate with Airbus to develop a nacelle and pylon for flight tests of the UK manufacturer's under-development UltraFan demonstrator engine. The European airframer has been recruited to provide "both nacelle and engine/aircraft integration architecture and technology enablers" for ground and flight tests under the future engine programme, R-R says.
LinkAirbus encouraged by laminar-winged A340 trialAirbus says the drag-reducing effects of the experimental wings on its laminar-flow demonstrator aircraft are proving better than previously thought, making application of the technology on a next-generation aircraft more feasible. In September 2017, the airframer began a flight-test campaign with an A340 that has been modified with reshaped outer wing sections to assess natural laminar flow on the aerofoil's upper surface.
LinkUS senators introduce bill to block F-35 delivery to TurkeyA bi-partisan group of US senators introduced a bill on 26 April to prevent the transfer of the Lockheed Martin F-35A to Turkey. The bill would also block Turkey’s role as a maintenance depot for the aircraft, according to a press release issued by the senators.
LinkNorthrop Grumman to develop algorithms to counter fast-changing enemy radarNorthrop Grumman will develop machine learning algorithms to help the Boeing EA-18G Growler’s electronic warfare system pin down and jam fast-changing enemy radar signals. Such machine learning algorithms would be needed “against agile, adaptive, and unknown hostile radars or radar modes,” according to the announcement of a $7.3 million cost-plus-fixed-fee contract by the US Navy on 25 April.
LinkF-35 competes against Eurofighter for German Tornado dealLockheed Martin has submitted an offer to the German government to replace the country’s Panavia Tornado fleet with F-35 fighters, as the US manufacturer targets further sales in Europe. Berlin has 90 Tornados in operation and intends to phase them out from 2025.
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