AIRLINE NEWS.

Position:Overview of Airlines - Industry Overview
 
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Adria Airways has become the newest member of the European Regions Airline Assn. Ljubljana-based Adria, which serves 40 European destinations with 48-seat CRJ200s, partners with Lufthansa, Air France, Austrian Airlines, Aeroflot, LOT and Montenegro Airlines. Jul 5, 2004

Aer Lingus will launch new routes from Dublin to Liverpool, Las Palmas, Lanzarote and Budapest at the end of Oct., bringing to 17 the number of routes introduced this year. The airline will operate a daily service to Liverpool, while flights to Budapest will operate four days a week and those to Lanzarote and Las Palmas will be weekly. Jul 2, 2004

Aer Lingus senior management asked the Irish government last week for permission to seek financial backing for a buyout. In a letter to the Transport Ministry, a three-man team comprising CEO Willie Walsh and his CFO and COO said it was confident "an attractive proposal could be developed and financed" if government consent was forthcoming, Reuters reported. Aer Lingus, which came close to bankruptcy after 9/11, has repositioned itself as a low-fare carrier and achieved an impressive financial turnaround under Walsh. It posted a stronger-than-expected net profit last year of eur69.2 million ($85.2 million), up 96% from net income of eur35.3 million in 2002. If the government agrees with the request from Walsh and his team, the airline effectively will be on the market with a bidding process that would be open to other potential buyers. Jul 7, 2004

Peru's Aero Continente was grounded and forced to cancel several flights after the Peruvian government said the airline had not submitted its new insurance policy. According to Reuters, the insurance expired July 10 and the company said it had secured a new policy and had notified the government. However, the government said Monday that it had received no documents and was halting flights for "the security and peace of mind of thousands of passengers," the report said. Specifically, the government is questioning the contract's coverage for ground staff. Aero Continente, Peru's largest airline, has been plagued with problems this year. In April it was barred from flying to the US because of safety concerns that were raised during an inspection by FAA officials. Then in June the US government put it on a blacklist, forbidding US companies from doing business with it. The US has charged that Aero Continente founder Fernando Zevallos is a drug trafficker. He currently is on trial in Peru for alleged drug-related offenses, according to the Associated Press. The airline operates a fleet of 35 jets and turboprops. Jul 14, 2004

Aeroflot is expected to announce today an invitation to suppliers to tender offers for the supply of 50 regional aircraft in the 75/100-seat category. Separately, Sibir is expected to make an announcement regarding a regional jet purchase in the next two weeks. Jul 2, 2004

Aerolineas Galapagos took delivery of the first of two ex-Air Malta 737- 200s. The operating lease is provided by Amtec Corp. and the transaction was arranged by Sigma Aircraft Management. Jul 2, 2004

Air Berlin may split its planned order for up to 70 aircraft between Airbus and Boeing and a decision could come at this month's Farnborough Air Show. Deliveries would begin in late 2005 or early 2006, which is around the same time that many of Air Berlin's 43 737s begin coming off lease. It also operates two F100s and two BAe 146s. "I can imagine having two separate fleets in the future. Air Berlin has reached a size now where outsourcing, like maintenance, gives us new opportunities. We like to take advantage of market opportunities like this, as well as attractive leasing rates," Managing Partner Joachim Hunold said. The airline plans to extend its network from Germany to Prague, Paris Orly and Scandinavia next year. It is operating a hub in Palma de Mallorca with 240 weekly flights and around 60% of its business comes from routes to and within Spain. The carrier wants to increase Spanish domestic flights and Hunold did not rule out the possibility of establishing a hub on the Iberian Peninsula. In the first six months of 2004, Air Berlin transported 5.4 million passengers, up 39% versus 2003, while load factor rose 1.5 points to 77.5%. Turnover increased 24.2% to eur453 million ($550.9 million). For the full year it expects to carry around 11.6 million passengers and post turnover of eur1 billion. Jul 2, 2004

Air Canada this week launched three weekly nonstop flights between Toronto and Bogota and between Toronto and Caracas. In addition, AC recently boosted its service to Santiago and Buenos Aires from three to four weekly flights. Jul 1, 2004

Air Canada took delivery of its first A340-500 on June 29 2004. Jul 1, 2004

Air France and Air Europa agreed to expand their codeshare agreement to include new flights between France and Spain. AF flights between Bordeaux, Lyon, Toulouse and Madrid, between Bordeaux, Lyon and Barcelona and between Paris CDG2 and Vigo now are operated under the AF and UX codes. In addition, flights between Madrid and Paris Orly as well as three daily CDG2-Barcelona flights are operated under the UX and AF codes, bringing the total number of AF/Air Europa weekly flights between France and Spain to 680. The Spanish airline currently is negotiating to join the SkyTeam alliance as an associate member. Jul 7, 2004

Air New Zealand began three weekly flights between Auckland and San Francisco using a 392-seat 747-400. Jul 1, 2004

Air Senegal International announced its decision to buy a 737-700 with delivery scheduled for July 2005. The CFM56-powered aircraft will have a two-class configuration with 114 seats. It will replace the carrier's 737-200s. Air Senegal also operates Dash 8s. The airline finished FY03 with a positive net result after only three years of operation and carried 360,000 passengers, up 44% over 2002. Jul 23, 2004

Air Wisconsin announced a restructuring of its senior leadership. Executive VPs and Directors William Jordan and Pat Thompson will become vice chairmen and remove themselves from the day-to-day operation of the company. Chairman, President and CEO Geoff Crowley will retain those titles but along with Thompson and Jordan will focus on long-term strategic and policy issues, the company said. Doug Horn, AWAC's current senior VP-customer service, will assume the role of executive VP and COO. Jul 2, 2004

AirAsia will add several key tourist destinations to its network next month. Beginning Aug. 5, the carrier will launch service from Kuala Lumpur to Bali. On Aug. 27 it will begin direct Kuala Lumpur-Medan flights. Separately, Thai AirAsia, an affiliate of AirAsia, launched daily nonstop service between Bangkok and Macau. Jul 9, 2004

AirCell this week successfully completed the initial phase of testing for its next-generation airborne telecommunications link aimed at permitting passengers to use certain kinds of cellphones and other wireless devices on commercial aircraft while in flight. The company plans to deploy a nationwide network in the continental US in the next 18-24 months. It said it is maintaining discussions with "major US airlines" regarding the services and has plans for commercial deployment. Initial testing of AirCell's system aboard scheduled airlines is targeted to begin early next summer. The initial phase of testing was completed in the Rocky Mountain West using a specifically equipped business jet and a modified ground-based cellular station. The testing was conducted on air-to-ground frequencies under Special Temporary Authorization from FCC. Data uploads and downloads were demonstrated and the results were confirmed with the aircraft operating at a variety of altitudes, airspeeds and configurations, the company said. Jul 8, 2004

AirTran Airways completed construction of its first maintenance hangar at Hartsfield-Jackson Atlanta International Airport. The hangar is 65 ft. tall and can fit two of the airline's new 737-700s parked wing-to- wing. The structure also houses more than 76,000 sq. ft. of work space and features a computerized atmosphere control system. Jul 1, 2004

AirTran Airways began two daily nonstop flights between Dallas/Ft. Worth and Los Angeles. Jul 2, 2004

Alaska Airlines celebrated the opening of its new state-of-the-art Concourse C at Anchorage. Jul 1, 2004

Alitalia expected to receive EC approval for bridge loan The European Commission is expected to approve at its July 20 meeting the Italian government's plan to provide a guaranteed bridge loan amounting to eur400 million ($492.7 million) to Alitalia. "Next week it should be possible to give the green light to this demand from the Italian government," Transport Commissioner Loyola de Palacio told reporters after a meeting with Italian ministers who included Transport Minister Pietro Lunardi. She said the likely approval follows a "strong commitment" from Italy that its flag carrier will be privatized. According to the Associated Press, Italian European Affairs Minister Rocco Buttiglione said Rome will relinquish control in the airline by reducing its stake to less than 50%, "possibly before six months" but at the latest "within a year." EC spokesperson Amador Sanchez Rico stated that the bridge loan cannot be used by the carrier for investments or to expand its activities. "We need to be sure the bridge loan they receive respects the market," he said. Meanwhile, the government still seems divided on the airline's fate. Italy's Northern League party intends to try to block the bridge loan. "We will do everything so that this decree doesn't come into force," said Welfare Minister Roberto Maroni, who is a senior member of the Northern League. The decree allowing a government- guaranteed bridge loan to Alitalia was approved by Prime Minister Silvio Berlusconi's government last month, but it still must be voted on in Parliament in the coming weeks. Jul 14, 2004

A federal grand jury in Miami returned an indictment charging two...

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