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Airline Finance News - North America.

Nov 20, 2006

Regulators must determine whether a consolidated airline industry would lower costs or merely reduce competition and drive prices higher, The New York Times editorial board writes. The board says "there is clearly some room" for consolidating the industry. Meanwhile, an editorial in the Atlanta Journal-Constitution urges lawmakers and Delta executives to "fight hard for the company's independence" so its headquarters can remain in Atlanta. Nov 17, 2006

Airlines stocks move higher on merger speculation. Shares of some airlines moved higher Wednesday on news of US Airways' bid for Delta Air Lines. The possibility of reduced flight capacity pushed up shares of AirTran Airways and JetBlue. "While we believe this news is positive for the entire industry, we believe the goodies are skewed (not surprisingly) toward East Coast airlines," Lehman Brothers analyst Gary Chase says.

Nov 16, 2006

Delta Air Lines, US Airways

Carriers would divest overlapping assets if bid succeeds, Parker says: US Airways and Delta Air Lines would need to divest assets in the Northeast if US Airways' hostile bid succeeds, US Airways CEO Doug Parker says. American Airlines, Northwest Airlines and United Airlines may want gates that would open up in Boston, New York and Washington. Analysts say the combined carrier would need to sell some assets to address regulators' antitrust concerns. Nov 16, 2006

Airlines recall furloughed workers to replace those who quit. Some airlines are recalling furloughed workers, but analysts say many of those workers will fill positions vacated by colleagues. "The rate of recall hasn't been so much based on growth or good times. It's based on people leaving the jobs," says aviation consultant Dan Akins. Nov 14, 2006

ACE Aviation

ACE Aviation To Sell Minority Stake In Air Canada. ACE said on Thursday it will sell a minority stake in its main operating unit, Air Canada, for up to CAD$605 million (USD$528 million), marking the return of the country's dominant airline to the public market. Nov 17, 2006

Air Canada

Air Canada Shares Slide On Market Debut. Shares in Air Canada dropped nearly 7 percent on Friday as the country's dominant airline debuted on the Toronto Stock Exchange after public offerings worth CAD$605 million (USD$530 million), a larger deal than expected. Nov 17, 2006

Air Canada

Air Canada net income included a C$102 million special charge related to Air Canada's obligations for the redemption of frequent flyer miles and a C$52 million gain thanks to the sale of more than 1 million US Airways shares. Excluding charges, the airline had a 10.3% operating margin. Nov 13, 2006

Air Canada

Air Canada passenger revenues were up 4% thanks to increases in all markets, except transatlantic routes. North American services accounted for all passenger revenue growth as the carrier boosted capacity by 9%, mostly on transborder routes, while reducing international capacity 1%. Canadian domestic revenues were up 4%, thanks to more capacity as unit revenues remained unchanged. More than half of the increased capacity was on transcontinental routes, with the remainder split equally between routes in Western Canada and the Maritimes. Nov 13, 2006

Air Canada

Air Canada Q3 profit hurt by change. Air Canada reported a smaller third-quarter profit related to a charge from the redemption of points at its Aeroplan customer loyalty program. Net income fell 62% to $91.1 million. Nov 13, 2006

Air Canada

Air Canada revenues on transatlantic routes decreased 3% as capacity was cut 6% and RASM improved 2%. About 50% of the revenue decline was due to the London terrorist threat in August. Yields rose 3% despite a hit from currency changes. Pacific revenues rose 2%. Nov 13, 2006

Air Canada

Air Canada third-quarter profit falls 62%. Falling operating income and a C$102 million ($90.2 million) noncash pre-tax charge related to the redemption of Aeroplan miles issued before 2002 weighed heavily on ACE Aviation's bottom line as the Air Canada parent reported a third-quarter profit of C$103 million, down 62% from C$271 million earned in the year-ago period. Nov 13, 2006

Air Canada

Air Canada's expenses rose 5.5%, with fuel accounting for almost two-thirds of that amount. As capacity went up 3%, unit costs increased 2%. Excluding fuel, CASM fell 1%. "This quarterly unit cost improvement demonstrates increasing traction in cost control," Dunne said. Fuel was up 13% as the price paid increased 9%. Air Canada is hedged 58% for November and December and 26% for 2007. Nov 13, 2006

Air Canada

Air Canada's U.S. transborder revenues were up 14%, driven by 20% more capacity and a unit revenue decline of 5%, mostly related to yield. The growth in capacity was aimed at long-haul routes with "very strong demand, especially to California, and to leisure markets, such as Las Vegas and Florida," said CFO Brian Dunne. "A significant increase in average stage length, currency and the expansion in more price-sensitive leisure markets all contributed to lower the average yield." Nov 13, 2006

Air Canada, Air Canada Jazz

Air Canada and Air Canada Jazz flew a combined 3.95 billion RPMs in October, a 4.6% increase over the year-ago month. Capacity climbed 3.8% to 5.03 billion ASMs and load factor was up 0.6 point to 78.4%. Nov 13, 2006

Comair, Delta Air Lines

Comair's fate in a merged Delta and US Airways also is a question mark. In their report, Raymond James analysts said Comair's business could be "substantially curtailed and possibly shut down." The carrier's flight attendants recently ratified a concessionary deal, but progress with gaining concessions from pilots is slow. Nov 17, 2006

Comair, Delta Air Lines

Comair flight attendants, represented by the International Brotherhood of Teamsters, ratified a four-year agreement reached last month that includes a pay cut (7.5%, according to the Associated Press), increases job security and caps health insurance payments at the bankrupt Regional subsidiary of Delta Air Lines. "With this vote our members have shown they are ready to move forward," said Connie Slayback, a Comair flight attendant who is president of Teamsters Local 513. "This agreement maintains industry leading wages and helps Comair begin the process of rebuilding the company." The airline still is in negotiations with the Air Line Pilots Assn. Nov 16, 2006

Comair, Delta Air Lines

Comair attendants finish voting today. Comair flight attendants today will finish voting on an agreement that will cut pay and benefits by $7.9 million. Results will be announced later today or on Wednesday. Comair, a unit of Delta Air Lines, says it needs the savings to emerge from bankruptcy protection. Nov 14, 2006

Delta Air Lines

Delta Air Lines Seeks Creditor Help To Fend Off US Air Bid - Report. Delta is trying to rally support from creditors to help fend off a takeover bid by US Airways, according to a newspaper report on Friday. Nov 17, 2006

Delta Air Lines

Delta Air Lines on track to turn profit in 2007, CFO says. Delta hopes to be "solidly profitable year-round" in 2007, Chief Financial Officer Ed Bastian says. The airline lost $46 million in the third quarter. Bastian says Delta will also lose money in the fourth quarter, but only a fraction of what it lost a year earlier. Nov 16, 2006

Delta Air Lines

Delta Air Lines's bankruptcy bills climb to nearly $100M. Lawyers and consultants working on Delta' bankruptcy reorganization have requested an additional $24.3 million to cover fees and expenses. So far, they have billed a total of nearly $100 million, including the latest request. Delta hopes to exit bankruptcy by the middle of 2007. Nov 13, 2006

Delta Air Lines, US Airways

Delta rallies support to fend off US Airways bid. Delta Air Lines has held a series of conference calls with creditors to evaluate US Airways' bid, according to media reports. Delta wants creditors to back its restructuring plan. US Airways, which launched its $8.76 billion bid Wednesday, is still trying to arrange a meeting with Delta's creditors committee. A meeting may be held as early as next week, and Delta representatives are expected to attend. Nov 17, 2006

Delta Air Lines, US Airways

US Airways and Delta regional, Shuttle operations up in air. US Airways' bid to acquire bankrupt Delta Air Lines raises questions about the future of the regional airlines that have service agreements with the mainline carriers and compete on a number of routes. Nov 17, 2006

Delta Air Lines, US Airways

Analysts estimate odds of US Airways-Delta deal. One Wall Street analyst puts the odds of US Airways and Delta Air Lines combining as high as 80%. Other analysts say United Airlines might succeed in a bid for Delta if it tops the more than $8 billion offered by US Airways. Nov 17, 2006

Delta Air Lines, US Airways

US Airways takeover of Delta faces big hurdles despite potential value. The US airline industry is taking stock of US Airways Group's $8 billion takeover bid for bankrupt Delta Air Lines, a deal that would reshape the landscape of the world's largest commercial aviation market but must overcome significant hurdles before coming to fruition. Nov 17, 2006

Delta Air Lines, US Airways

Bid for Delta Air Lines may set off wave of mergers, observers say. US Airways' hostile bid for Delta could trigger a wave of merger activity in the airline industry. Some observers say consolidation could help the industry speed its financial recovery. Delta CEO Gerald Grinstein repeated Wednesday that Delta plans to emerge from bankruptcy as an independent airline. US Airways CEO Doug Parker said a combination of the two airlines could create $1.65 billion in annual cost savings. The deal faces several obstacles, including Delta management, antitrust issues, and a possible competing bid from another carrier or investor group. Nov 16, 2006

Delta Air Lines, US Airways

Unions wary of proposed merger: While US Airways, now bidding to take over Delta, has won high marks from investors for its efforts to integrate with America West, union reaction has been less than enthusiastic. US Airways CEO Doug Parker promises the airline would spend $90 million to equalize pay among a combined airline's workers. Union leaders say existing pay problems should be fixed before any merger with Delta.

Nov 16, 2006

Delta Air Lines, US Airways

US Airways seeks another transformation in bid for Delta. After two bankruptcy filings and a merger with America West Airlines, US Airways now hopes to become the world's largest airline. The company on Wednesday launched a hostile bid for Delta Air Lines. Some analysts say labor questions and Delta's size could make a US Airways-Delta combination complicated. Nov 16, 2006

Delta Air Lines, US Airways

US Airways' bid to merge with Delta prompted Standard & Poor's to place the company on CreditWatch, saying that if US Airways successfully merges with Delta, ratings could be raised modestly. But if a competing Delta bid emerges that forces US Airways to raise its offer, ratings would fall. Nov 15, 2006

Delta Air Lines, US Airways

US Airways' success in acquiring Delta isn't assured. While Parker highlighted to analysts that US Airways management believes no regulatory issues exist that cannot be resolved, analysts at Bank of America pointed out antitrust concerns are likely to focus on the proximity of Delta and US Airways' Atlanta and Charlotte hubs. Nov 15, 2006

Hawaiian Airlines

Hawaiian Airlines flew 598.9 million RPMs in October, up 2.3% from the year-ago period. Capacity rose 7.1% to 692.8 million ASMs, dropping load factor 4.1 points to 86.4%. Nov 15, 2006

Midwest Air

Midwest Air Group carriers flew 335.3 million RPMs in October, up 17.3% from the year-ago month. Capacity rose 4.2% to 438.5 million ASMs, lifting load factor 8.6 points to 76.5%. The company estimated a 2.8% increase in yield to 15.07 cents and a 16.5% gain in RASM to 12.98 cents. Nov 15, 2006

Northwest Airlines

Northwest Airlines to select new uniform for attendants, ground staff. Northwest plans to select new uniforms for its flight attendants and ground staff. The employees have worn their current navy-blue uniforms for the past 14 years. Northwest plans to start phasing out the old uniform next fall. Nov 13, 2006

Regional Express

Regional Express Holdings, which operates as Rex, posted a A$5.7 million profit in the first fiscal quarter, up 46% from the year-ago period, and raised its FY forecast to a 20% year-over-year increase in net profit. First-quarter passenger numbers grew 20%, load factor rose 3 points to 68% and passenger revenue surged 22.3%. Costs climbed 8.5%. Nov 17, 2006

SkyWest

SkyWest appears to have the best shield against any potential upheaval in its existing business, the analysts explained, as a result of the bankruptcy court affirming its 15-year contract with Delta. Existing contracts between Delta and its regional partners Republic Airways Holdings and Mesa are being rebid, the analysts said. Nov 17, 2006

United Airlines

United sees compelling logic in airline mergers, CFO says. The airline industry needs consolidation, a United Airlines executive said Thursday. United Chief Financial Officer Jake Brace declined to comment on whether United would launch a competing bid against US Airways for Delta Air Lines. "We're going to do what makes sense for our company, and we'll be interested to see what happens with US Air and Delta," Brace said. Nov 17, 2006

United Airlines

United Airlines considers strategic options. The economic and political environment may force United Airlines to consider a leveraged buyout, some investment and restructuring experts say. Sources close to United say CEO Glenn Tilton has hired an investment bank to evaluate the carrier's options, including a merger. "This is speculation heaped on speculation, and hardly worthy of a comment," said Jean Medina, a United spokeswoman.

Nov 13, 2006

US Airways

US Airways, Delta employees have mixed reaction to potential merger. US Airways and America West Airlines pilot groups, represented by the Air Line Pilots Assn., conducted informational picketing yesterday in Charlotte and Phoenix, upset that the company is looking to acquire Delta Air Lines even though it "has yet to complete the integration of the pilot groups that is required" by terms of last year's US/AWA merger. Nov 17, 2006

US Airways

US Airways pilots make contract demands. US Airways pilots say they should have a fair contract in place before the carrier moves to acquire Delta Air Lines. The airline and the pilots union are currently in contract negotiations. The pilots work under two contracts: one for America West pilots and one for US Airways pilots. Nov 17, 2006

US Airways

US Airways' Parker aiming for repeat takeover victory: In 2005, US Airways CEO Doug Parker successfully took over the airline while leading America West. Like Delta, US Airways also operated under bankruptcy protection. After the combination, the airline eliminated unprofitable routes, lowered costs and streamlined its fleet. Nov 16, 2006

US Airways

US Airways is pledging a 10% capacity reduction from combining the carriers and synergies of $1.65 billion in two years. Parker emphasized half those synergies would be lost if the merger occurred after Delta exited Chapter 11. "The right way to do this is to get the proposal out now," he noted. Nov 15, 2006

Z

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Nov 13, 2006
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Date:Nov 20, 2006
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