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Airline Finance News - North America.

Jan 8, 2007

Calyon Securities analyst Ray Neidl expects the industry to post USD$6 billion in profits in 2007 after posting USD$2.3 billion in profits last year -- its first profitable year since 2000. He said the estimate doesn't assume falling fuel prices. With the most bullish outlook for some time, many of the sector's stocks are breaking multi-year highs. The Amex airline index is up 9 percent from a year ago, while shares of American Airlines parent AMR, and Continental Airlines are trading at their highest since August 2001. Jan 7, 2007

The airline industry is highly exposed to jet fuel prices, which vie with labor as its largest expense. A one cent change in the price of jet fuel costs the industry about USD$190 million annually, according to lobby group the Air Transport Association. To October (the latest data available), the U.S. airline industry consumed 3.4 percent less fuel than over the same period in the previous year, according to data from the US Energy Information Administration. Jan 7, 2007

Alaska Airlines

Alaska Airlines has hedged 50 percent of its first-quarter fuel needs at a price of USD$58.78 a barrel. That is slightly above the current price of USD$55.60, which means it is effectively inflating its fuel bill. Jan 9, 2007

American Airlines

American Airlines flew 11.36 billion system RPMs in December, down 1.1% from the year-ago month. Capacity fell 1.3% to 14.35 billion ASMs and load factor rose 0.2 point to 79.1%. Domestic RPMs were down 1.9% to 7.4 billion against a 2.2% decline in capacity to 9.22 billion ASMs. Load factor climbed 0.2 point to 80.2%. International traffic rose 0.4% to 3.95 billion RPMs, capacity was up 0.3% to 5.13 billion ASMs and load factor inched up 0.1 point to 77%. Jan 5, 2007

American Airlines, FL Group

FL Group acquires 6% of American, transfers Sterling to new consortium. Serial airline investor FL Group was busy over the holidays, announcing that it had purchased a 5.98% stake in American Airlines parent AMR Corp. for more than $400 million and selling LCC Sterling Airlines for [euro]210 million ($277 million) in cash and a three-year shareholder loan to Icelandic consortium Northern Travel, of which FL Group is a member. Jan 3, 2007

American Airlines, FL Group

FL Group now is American Airlines parent AMR's third-largest shareholder with 12.8 million shares. It said it has been building the stake "for a considerable period of time" and made the announcement once it exceeded the 5% reporting threshold. Jan 3, 2007

Continental Airlines

Continental Airlines, the highest earning US carrier in the 2006 third quarter with $237 million in net income, said it expects to report a "modest loss" for the fourth quarter, adding that consolidated RASM likely will increase 4.1%-4.4% with mainline RASM growing 5.5%-6.5%. Jan 4, 2007

Continental Airlines

Continental flew 7.48 billion consolidated RPMs in December, up 6.9% on the year-ago month, on a 4.4% rise in capacity to 9.41 billion ASMs, producing a load factor of 79.5%, up 1.8 points. Domestic traffic grew 5.4% to 3.69 billion RPMs on a 2.8% capacity increase to 4.51 billion ASMs, while international traffic climbed 9.2% to 2.92 billion RPMs on a 6.8% capacity hike to 3.77 billion ASMs. Domestic load factor was 81.8%, up 2.1 points, and international load factor rose 1.7 points to 77.5%. November consolidated RASM lifted 3.3% and December RASM is estimated to have risen 3.5%-4.5%. Jan 4, 2007

Delta Air Lines

US Takes Over Delta Pilots' Pension Plan. Delta Air Lines defaulted on pensions covering active and retired pilots on Friday, a long-planned move that allows the company to clear a major hurdle in its restructuring. Jan 5, 2007

Delta Air Lines

Delta Air Lines reported a $49 million net loss for the month of November, or a $12 million loss excluding reorganization items. The result compares to a $181 million net loss and a $164 million loss excluding reorganization items in November 2005. "November's results continue the momentum that will deliver a nearly $2 billion year-over-year improvement in Delta's net income excluding reorganization items for 2006," VP and CFO Edward Bastian said. Operating income of $52 million, which included a $31 million negative impact from fuel hedges, was a reversal from a $107 million operating loss in November 2005. Unit revenues rose 11.2% to 10.7 cents. Operating expenses fell 8.1% against a capacity reduction of 6.5% and mainline CASM was down 2.8% to 10.43 cents. Excluding fuel, mainline unit costs fell 2.7% to 7.33 cents. Jan 4, 2007

Delta Air Lines, American Airlines

Delta Air Lines and American Airlines said on Tuesday they raised fares in Canadian markets to match an increase by Air Canada. Delta increased fares by USD$3, USD$6 and USD$9 one-way depending on the length of the flight, spokeswoman Betsy Talton said. American increased fares USD$6 each way, a spokesman said. The move follows an increase in fares by Air Canada on Monday night for travel to the United States from Canada, according to Neil Bainton, an analyst at airline travel planning service FareCompare. Jan 9, 2007

ExpressJet Airlines

ExpressJet Airlines flew 861.1 million RPMs in December, up 5.4% from the year-ago month. Capacity climbed 3% to 1.12 billion ASMs and load factor rose 1.7 points to 77.1%. Jan 4, 2007

Northwest Airlines

Northwest Reorganization Plan Due By Next Week. Northwest Airlines intends to file its plan of reorganization with a US bankruptcy court by early next week, a Northwest spokesman said on Tuesday. Jan 9, 2007

Northwest Airlines, Mesaba Airlines

Northwest Close To Mesaba Takeover. Northwest Airlines on Friday said it reached a deal to buy bankrupt regional carrier Mesaba Airlines, a move analysts say could save the struggling feeder airline. Jan 5, 2007

Republic Airways

Republic Airways flew 558.2 million RPMs in December, up 26.1% from the year-ago month. Capacity rose 25.2% to 800.7 million ASMs and load factor gained 0.5 point to 69.7%. Jan 5, 2007

US Airways

US Airways Beefs Up Delta Bid Team. US Airways on Monday bolstered the financial muscle behind its hostile bid for bankrupt Delta Air Lines, adding Morgan Stanley as a lead financial backer alongside Citigroup. Jan 8, 2007

US Airways

US Airways yesterday announced a long-haul expansion from its Philadelphia hub that Chairman and CEO Doug Parker said "demonstrate[s] our commitment to our international growth prospects." Subject to foreign regulatory approval, US will start 767 service to Athens on May 25, 757 flights to Brussels on June 1 and 767 flights to Zurich on June 8. All services will be daily. Athens flights end Oct. 6, with the remaining routes operating year-round. Next summer US will offer 22 daily flights to 19 European cities in 12 countries. Jan 4, 2007

World Airways

World Air Holdings, parent of World Airways and North American Airlines, last week said it posted a $5.9 million net profit in the third quarter ended Sept. 30, up 8.5% from the $5.5 million earned in the year-ago period. Its operating income of $8.2 million was a 20.2% decline from the year-ago quarter's but higher than the $6-$8 million forecast in November when it announced the delay in its third-quarter report. Revenues rose 6.4% to $231 million and expenses climbed 7.7% to $222.9 million. World forecast a $4-$6 million operating loss in the fourth quarter and a 10% year-over-year increase in 2007 revenues to $900 million and an operating margin of 4%-7%. Jan 3, 2007 Z Editor: Aram Gesar, eMail:

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Publication:Airguide Online
Date:Jan 8, 2007
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