Airline Finance News.

US airlines flew 572.89 billion domestic RPMs in 2005, an increase of 4.5% over 2004, according to statistics released yesterday by the US Dept. of Transportation. The number of passengers increased 4.1% to 634.5 million. Capacity rose just 0.9% to 742.27 billion ASMs and load factor grew 2.7 points to 77.2%. Southwest Airlines continued to set the pace with 88 million passengers, compared with 81 million in 2004. Delta Air Lines was second and American Airlines third. Mar 17, 2006

All who fly should pay fair share. The cost for air-traffic control service should be based on the use of the system, writes Andrew Stober of the Transportation Research Board. Airlines support a Transportation Department proposal to replace the ticket tax with a system that will charge individual aircraft based on their use of airspace. Corporate jets alone account for 15% of all flights, yet don't pay their fair share, Stober writes in this Wichita Eagle commentary. Mar 16, 2006

Travel insurers continue writing policies. Some travel insurance firms continue to write policies that would reimburse travelers if their trips are disrupted by strikes at Delta Air Lines or its Comair unit. Unions at both airlines are conducting strike authorization votes. Mar 15, 2006

Labor Department investigates Northwest's pension fund. The Department of Labor is investigating whether Northwest Airlines systematically underfunded its pension plan for three years. Officials declined to elaborate but noted that the investigation is a civil matter. A spokesman for Northwest said the company has provided some documents to investigators but wants others kept confidential. Mar 15, 2006

Subsidy dispute escalates on request for information. The European Union has asked the World Trade Organization to allow countries to get information from one another detailing payments made to companies. The U.S. has declined to provide information requested by the European Union. The two sides are locked in a complicated dispute over aircraft subsidies. The WTO has formally suspended its timetable for completing initial investigations. Mar 15, 2006

Air India, Indian Airlines

Air India and Indian Airlines are on course to merge within the year, Civil Aviation Minister Praful Patel told Indian media. The state-owned carriers will combine into an airline operating 125-130 aircraft by the end of the state fiscal year in April 2007. "It is an absolutely logical proposal to consolidate and optimize the use of the assets of the two public sector airlines," Patel was quoted as saying. At the same time, the government reportedly intends to sell off 20%-25% of each carrier to fund fleet renewal. Mar 17, 2006 Cathay Pacific Cathay flew 5.22 billion RPKs in February, a 9.2% increase over the year-ago month. Capacity rose 9.6% to 6.77 billion ASKs, dropping load factor 0.3 point to 77.1%. Freight traffic increased 12% to 502.8 million CTKs against a 5.4% rise in capacity, lifting cargo load factor 4 points to 68%. Mar 14, 2006

GOL LINHAS AEREAS INTELIGENTES

Gol's profits soar to record levels. Gol's year of explosive expansion ended with record annual and quarterly profits as the Brazilian LCC posted net earnings of BRL513.2 million ($236 million) for 2005, an increase of 33.4% over the previous year's BRL384.7 million.Profit for the fourth quarter ended Dec. 31 was BRL170.6 million, a 37.6% rise over net income of BRL123.9 million in the year-ago quarter. Gol said its fourth-quarter performance "demonstrated the company's ability to grow capacity significantly while reducing costs and maintaining high profitability and quality service, even during a period of extremely high fuel prices." Gol's annual revenues grew 36.1% to BRL2.67 billion against a 47.9% rise in expenses to BRL2.05 billion, driven by a 76% jump in fuel costs to BRL808.3 million. Operating profit climbed 7.8% to BRL621.4 million. The airline did not release annual operating or unit performance statistics. Mar 13, 2006

LAN Airlines

LAN Airlines reported a 5.8% year-over-year rise in system traffic in February compared to a 7.1% increase in capacity, which dropped load factor 1 point to 75.5%. Mar 14, 2006

TAM - TRANSPORTES AEREOS REGIONAIS

TAM to funnel 80% of IPO proceeds into fleet. TAM released more details about last week's global IPO in New York and Sao Paulo that netted the Brazilian carrier close to R$1.5 billion ($706.3 million), which will be used "entirely to finance its activities," the company said. Mar 17, 2006

TAM raised nearly BRL1.5 billion ($689.8 million) Friday through stock issues on both the Bovespa exchange in Brazil and the New York Stock Exchange, according to press reports. Mar 13, 2006