Airline Finance News.

Pensions, pay shrink for pilots at major airlines. Airlines pilots have taken large cuts in their pay and pensions, and many are required to work more hours. Most large carriers have cut pay for employee groups in order to manage higher industry costs. Some pilots say morale is suffering. Mar 10, 2006

Latin American Airline Assn. issued a statement Monday protesting "massive air transport fee increases" by the Jamaican government and warning that some members already are rethinking current and future operations. AITAL said Jamaica raised overflight fees by 180%, boosted communication fees and instituted a jet fuel storage and handling fee of 3.7 cents per gal. "We are outraged that a country so dependent on air travel and tourism would choose to raise costs so significantly with no justification," AITAL Executive Director Alex de Gunten said. Mar 8, 2006

President supports plan to relax investment restrictions. The White House will continue supporting a plan that would relax limits on foreign investments in U.S. carriers. Some lawmakers are concerned about the impact of the plan on airline jobs and services. Mar 8, 2006

Russian airlines reported a combined RUB2.2 billion ($78.7 million) drop in net profit in 2005, according to a statement from the Federal Air Transport Agency cited by Russian media. Revenues increased 10% to RUB180 billion against a 20% lift in costs. The number of passengers grew 3.9% to 35.1 million and passenger revenues rose 3.4%. Mar 7, 2006

U.S. domestic flights more crowded, fares inch higher. Monthly traffic shows that domestic capacity dropped 3.5%, while domestic revenue passenger miles rose 2.2%. Mar 7, 2006

Airlines face complex process when planning routes. Airline executives face a complex task when they sit down to decide which routes to fly. They base their decisions on the capability of equipment, profitability, and airport costs. "Obviously, airlines are doing a lot of other things, but they're fundamentally flying people from point A to point B," said Webster O'Brien of industry consulting firm SH&E in Boston. "Understanding how to do that profitably is on the short list of activities critical to success." Mar 6, 2006

No justification for changes to ticket advertising. Rationales for changing the way airfares are advertised are "ludicrously flimsy," the New York Times editorial board writes. Some airlines have asked the Department of Transportation to allow them to separate certain costs from the advertised ticket price. Some analysts suggest regulators may allow the advertising rules to be changed, the board writes. Separately, the largest U.S. network carriers as well as at least one major international airline want the DOT to eliminate the rule. Mar 6, 2006

Cathay Pacific

Cathay Pacific weathers turbulent year as profits fall. Cathay Pacific Airways emphatically stamped itself as one the world's strongest performers with a profit of HK$3.47 billion ($446.9 million) in 2005 despite a 38% rise in fuel prices. Although profit fell 23.2% from 2004's HK$4.52 billion, Cathay's underlying fundamentals improved. Turnover climbed 19.1% to a record HK$50.91 billion, passengers carried grew 13% to 15.4 million, load factor lifted 1.4% to 78.7%, passenger yield increased 1.1% and freight jumped 15% to 1.1 million tons. Cost per ATK excluding fuel decreased 1.9% while average aircraft utilization was up 5% to 12.6 hr. Total operating expenses rose 24.7% to HK$46.77 billion, dropping annual operating profit 21% to HK$4.14 billion. Overall fuel costs increased 48.5% to HK$11.64 billion. ASKs climbed in all regions and only the North American market saw an easing of load factor, but that was more than offset by a leap in yield. Overall passenger capacity rose 11.8% to 82.77 billion ASKs and load factor increased 1.4 points to 78.7%. Mar 9, 2006

Gol

Gol's February traffic increased 58.2% over the year-ago month to 940.5 million RPKs. Capacity rose 60.4% to 1.34 billion ASKs, dropping load factor 1 point to 70.1%. Domestic traffic climbed 55.6% to 860.8 million RPKs against a 56.1% lift in capacity to 1.22 billion ASKs. Load factor dipped 0.3 point to 70.5%. International traffic increased 93.9% to 79.7 million RPKs, ASKs rose 122.9% to 120.8 million and load factor fell 9.8 points to 66%. Mar 9, 2006

Malaysia Airlines

Malaysia Airlines released its Business Turnaround Plan last week. It charts a course for a return to the black by 2007 and outlines an economic, operational and philosophical overhaul of the underachieving carrier, which admitted that low yields and surging costs will exhaust its cash by April unless it implements drastic changes. Following three consecutive loss-making quarters, MAS said its "primary obligation to the government and all other shareholders is to drive top-tier financial performance. Everything we do must be designed to achieve that objective." Mar 6, 2006

Qantas

Qantas shelved plans to establish intra-Asia freight services through a Thai-based joint venture amid deepening concerns about rising fuel prices and the medium-term outlook for air cargo. Executive GM-Associated Businesses Grant Fenn said the airline has "put back indefinitely" the start of flights by 49%-held Thai Air Cargo. He told The Australian newspaper yesterday that "a decision on operating in the future will be made when the economic environment has improved." TAC was established with 51% owner CTI Holding of Thailand as a vehicle for Qantas to access more effectively the rapidly expanding intra-Asia freight market. It was planned to hub out of Bangkok to India, Singapore, Shanghai and Hong Kong. Mar 7, 2006