Europe Airline Daily: Main News: 5 May 2008

IATA reports (02-May-08) total international passenger traffic (RPKs) on Europe services in Mar-08 rose 3.7% year-on-year, while cargo traffic (FTKs) increased 1.9%.

European Union issued a directive allowing European airlines to purchase and sell takeoff and landing slots, a move which could potentially help the Alitalia sale process (Thomson Financial, 04-May-08). According to the directive, the slots can be sold by the airlines to which they were assigned, swapped within the airline's codeshare agreement or used to purchase services. A few months ago, Alitalia sold three pairs of slots at London Heathrow International Airport for EUR92 million.

Airbus is reportedly facing further delays to its A380 programme, according to a report in German magazine, Wirtschafts-Woche, citing a letter by CEO Tom Enders to customers and other unnamed company sources. Mr Enders stated last week he is conducting a fundamental review of the A380 schedule. Details of the latest report include:

• 2008: Airbus will “almost” reach this year's target of 13 A380s;
• 2009: “Likely to miss” target of 25 deliveries;
• 2010: “Highly questionable” whether Airbus will achieve its target of producing four A380s per month.

Aer Lingus announced plans to commence a recruitment process for a new CFO over the “coming days”, as current CFO, Greg O’Sullivan, moves to become the airline’s new Company Secretary (cityam.com, 02-May-08). Current company secretary, Laurence Gourley, will become the airline’s Head of Legal Affairs. Both moves will come in to effect from the group's AGM on 06-Jun-08.

Aer Lingus, Aer Arann, CityJet and Ryanair formed a new consultation committee, the 'Dublin Airport Capex Consultation Committee’ (DACC), which, according to Ryanair, was formed in response to Dublin Airport Authority’s “failure in the past to properly consult with users or to meet their reasonable requirements in terms of facilities at Dublin Airport”. The Committee has since been joined by several other airlines and handlers operating at Dublin Airport.

Monarch Airlines reports (02-May-08) the following traffic highlights on scheduled services for the two months ended 30-Apr-08:

• Passenger numbers: 571,387, +1.6% year-on-year;
• Passenger load factor: 80.9%, -0.4 ppts.

Silverjet entered (02-May-08) a subscription agreement and a loan facility agreement with Viceroy Holdings. Under the loan facility agreement, Silverjet may borrow up to GBP8.4 million. Under the subscription agreement, which still requires shareholder approval, the carrier will issue 25.1 million subscription shares at GBP0.17 pence per share to Viceroy, raising GBP4.3 million. Meanwhile, Silverjet confirmed it is in negotiations for a potential takeover with three bidders (Scotland on Sunday, 04-May-08). It follows a USD25 million investment in the carrier last week by an unnamed Abu Dhabi-based investor.

Silverjet "This investment means that Silverjet is now well placed, both financially and strategically, to exploit the opportunities which exist in the airline and all-business class market - a market which we now dominate," Lawrence Hunt, CEO. Source: Silverjet, 02-May-08.

Thomas Cook Airlines based (02-May-08) an A320 aircraft at Leeds Bradford International Airport (LBIA), increasing capacity by 20% for the 2009 Summer season. The airline will operate the airport to 17 destinations in Mainland Spain, the Balearics, the Canaries, Greece, Malta, Portugal, Turkey and Cyprus.

XL Airways announced plans to launch London Gatwick-Knock service, effective 14-Dec-08 – see Route Changes Table for more information (7.24holiday.com).

Austrian Airlines investor, Sheikh Mohamed Bin Issa al Jaber, has reportedly withdrawn from a deal to invest EUR150 million in the carrier (Reuters, 03-May-08). Further details were not disclosed.

Correction: SkyEurope reports (29-Feb-08) the following financial/traffic highlights for the three months ended 31-Dec-07: (previously reported as three months ended 31-Mar-08)

• Revenue: EUR53 million, +32.2% year-on-year;
• Operating costs: EUR67.9 million, +29.8%;
• Net profit (loss) before tax: (EUR11.3 million), compared to a loss of EUR13.8 million in the corresponding period last year;
• Passenger numbers: 857,900 tonnes, +44.1%;
• Passenger load factor: 70.7%, -5.1 ppts.

S7 launched seasonal services from Moscow to Varna (Bulgaria) and Simferopol (Ukraine) – see Route Changes Table for more information. The routes will operate from late Apr-08 through to early Oct-08.

United Airlines and US Airways could reportedly make a decision regarding a possible merger before mid-May-08 (AFP, 05-May-08). Talks between the carriers have been ongoing since Mar-08.

Japan Airlines announced (02-May-08) the following revised financial forecasts for the 12 months ended 31-Mar-08:

• Revenue: USD21,156 million, -0.4% compared to previous forecast,
• Operating costs: USD20,340 million, -2.3%;
• Operating profit: USD854 million, +87.5%;
• Net profit: USD152 million, +128.6%.

Japan Airlines: “As a result of the effectiveness of ‘premium strategies’ aimed at attracting business and top-tier travellers through product and service enhancement and development, international business passenger demand has been robust. Even though domestic passenger demand is slightly lower than expected, the revised forecast for operating revenue is almost the same as its previous forecast. Due to the effectiveness of group-wide cost reform… the JAL Group now forecasts that operating cost reductions will be greater than previously expected,” Company statement, 02-May-08.

Japan Airlines (JAL) announced (02-May-08) it has established a ‘reserve fund’ of USD59 million for an ongoing investigation by the European Commission into alleged violations of the anti-trust law regarding international air cargo operations, involving major global airlines. The fund is in additional to the USD110 million fine, resulting from JAL’s plea agreement with the US Department of Justice for violations of antitrust law.

Singapore Airlines has aligned its Sydney-Singapore and Singapore-London A380 services to offer one-stop through service with a two-hour stopover (Herald Sun, 03-May-08). Qantas reportedly plans to operate its third and fourth A380 (delivering after Dec-08) on the London route.