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Airline Finance News - North America.

Robust forecasts need dose of skepticism, official says. Some experts say aviation is in a period of robust growth. Air Transport Association Executive Vice President John Meenan noted that forecasts, in general, should be taken with a grain of salt. Last year, the industry lost $10 billion. Mar 30, 2006

Airline bonds rally on strong demand for travel. Strong demand for travel is propelling the biggest rally for airline bonds in nine years. Analysts noted that airlines are leaving bankruptcy with less debt, which is also boosting the bond market. Mar 30, 2006

Airlines face many attempts to boost taxes. Governments see airlines as an easy target for raising revenue by taxation, according to some experts. France may soon implement an airline tax to reduce poverty, for example. The International Chamber of Commerce has warned that increased taxation will hurt the economy and markets. Air Transport Association Chief Economist John Heimlich says airlines have been pressured to pay higher taxes each year since 2001. Mar 27, 2006

American Airlines

American rehires Horton as chief financial officer. American Airlines has rehired Thomas W. Horton as its chief financial officer. Horton left American in 2002 to become financial chief and vice chairman at AT&T. Before the AT&T move, Horton had worked at American for 17 years, serving in a variety of roles. Mar 30, 2006

AMR Corp., parent of American Airlines, reported in an SEC filing that it expects first-quarter consolidated unit revenue to increase 9.9%-10.9% over the year-ago quarter. Unit costs were 11.83 cents in February, or 8.57 cents excluding fuel. Quarterly CASM is expected to be 11.36 cents, or 8.13 cents excluding fuel. AA has hedged 32% of its first-quarter fuel consumption at $63 per barrel. Mar 30, 2006

AMR announced the return of Thomas Horton, who will become CFO and executive VP-finance and planning. Horton left AMR in June 2002 to join AT&T. He succeeds James Beer, who announced his resignation in February to take a job with a California software firm. AMR also announced the impending retirement of Senior VP-Miami, Caribbean and Latin America Peter Dolara and American Beacon Advisors President William Quinn. As a result, it named VP-Europe and Pacific Division Craig Keeger as senior VP-international and VP and General Sales Manager C. David Cush as senior VP-global sales. VP and Controller Douglas Herring will succeed Quinn as ABA president and Quinn will remain as CEO and chairman. Isabella Goren was named senior VP-customer relationship marketing and reservations and MD-Airline Profitability and Financial Analysis Brian McMenamy was named VP and controller succeeding Herring. Mar 30, 2006

Delta Air Lines

Delta Air Lines will cut approximately 1,000 management and administrative jobs, according to an internal memo released last week cited by press reports. Last fall the bankrupt carrier targeted 7,000-9,000 positions throughout the company for elimination by next year. Among the departures will be marketing head Paul Matsen. It is not clear if Matsen's departure is related to the cuts. Mar 31, 2006

Delta marketing chief leaves as carrier cuts costs. Delta Air Lines marketing chief Paul Matsen has left the carrier. Matsen helped launch the carrier's Simplifares program, which capped certain airfares. Delta said it will not replace Matsen. Separately, Delta on Wednesday said it will cut administrative and management employment by 20%. Mar 30, 2006

Delta Air Lines and its pilots, represented by the Air Line Pilots Assn., were told last week by a three-man arbitration panel to continue negotiating ahead of an April 15 deadline and to submit confidential progress reports on April 3 and 7, according to press reports. Arbitrator Richard Bloch said a ruling by the panel would constitute "an abandonment of responsibility that will and should haunt all of you." Meantime, ALPA's Strike Preparedness Committee will conduct a practice strike tomorrow. The union said on its website that a strike authorization ballot is open until April 4. Mar 29, 2006

Delta announced Monday that it received approval from the lenders of its $1.9 billion DIP credit facility to reduce the interest rate on its three term loans, resulting in annual savings of $30 million and a reduction of the interest rate in its post-petition financing from American Express Travel Related Services. Mar 29, 2006

Delta, Northwest restructuring fees add up. Bankruptcy fees are mounting at Delta Air Lines and Northwest Airlines. The carriers could owe lawyers $276 million in fees and expenses by the time they exit bankruptcy. Mar 27, 2006

Hooters Air

Hooters Air is going bust after chipping steadily away at its flight schedule over the past three months. It will end scheduled service by April 17, according to the Myrtle Beach Sun News. The airline is owned by Robert Brooks, chairman of Atlanta-based fast food chain Hooters of America. He launched Hooters Air in 2002 after acquiring Pace Airlines, a North Carolina-based charter carrier. Based at Myrtle Beach International Airport, Hooters was designed for leisure travelers. It eventually extended service to 15 destinations and operated up to seven aircraft. Pace Airlines will continue to provide charter service operations, a company spokesperson said. Hooters chairman Bob Brooks said he hoped to "have a little fun" in an industry that had always fascinated him. "The flying industry is in a terrible mess," Brooks said. "I've got a fair amount of money, but I don't have enough to fix this little lot!" Mar 30, 2006

Northwest Airlines

Northwest hopes to operate new unit by June. Northwest Airlines hopes to operate a new regional jet unit, dubbed Compass Airlines, in June. In five years, the unit may fly up to 36 small jets, the company said in a filing with the Department of Transportation. Northwest, which operates under bankruptcy protection, said the unit is a vital part of its restructuring. Mar 30, 2006

Northwest hopes to avoid paying $130 million debt. Northwest Airlines sued the Metropolitan Airports Commission in an attempt to avoid paying on $130 million in revenue bonds. The airline claims the financing is borrowed funds and not a true lease. Separately, Northwest is planning a regional subsidiary, called Compass, to provide service with new two-class 76-seat regional jets between its Minneapolis/St. Paul and Washington Dulles hubs. Mar 29, 2006

United Airlines

United to add 4,000 new jobs this year. United Airlines expects to add 4,000 jobs this year, after five years of labor force reductions. The airline attributed its hiring plans to strong demand and increased capacity. Mar 31, 2006
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Publication:Airguide Online
Geographic Code:1USA
Date:Apr 3, 2006
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