ATW Daily News

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Tuesday July 15, 2008

Air Macau has become another victim of surging oil prices and is clinging to survival as it awaits help from parent Air China Group. According to China Business News, the Macau carrier posted a net loss in excess of MOP200 million ($24.6 million) in the first six months of this year, more than half of its registered capital of MOP400 million. Under Macau law, exceeding that threshold requires the company to either inject new capital or declare bankruptcy.

Air China Board Secretary Huang Bin acknowledged Air Macau's request for help and said CA will determine a solution with other NX stakeholders, including TAP Portugal's SEAP investment fund (15%), casino company Sociedade de Turismo e Diversoes de Macau (14%), the Macau government and EVA Air. CA holds a 51% stake.

In a company statement cited yesterday by the Macau Daily News, Air Macau said it has reached a strategic cooperation agreement with CA and that aid will be extended soon. Industry analysts are suggesting that the recently inaugurated flights across the Taiwan Strait will join oil prices in impacting NX's performance, especially when, as expected, regularly scheduled service begins (ATWOnline, July 9). Currently, 60% its operating revenue is generated by transfers between the Chinese mainland and Taiwan. But Air Macau noted in the statement that CA will support its effort to secure "special routes" from CAAC after the regular cross-strait flights begin.

by Katie Cantle

Republic Airways Holdings will cut 10% of its employees, or 500, "in response to changing market conditions and expected reductions in its small jet contract flying," it said Friday. It said cuts will take place over the next several months and that "a portion will occur through normal attrition." Chairman, President and CEO Bryan Bedford said the reductions "reflect our response to the actions our network partners are taking to reduce the size of their domestic hub operations in light of sustained, high fuel prices. The combined impacts of fewer aircraft flying and lower utilization rates on our smaller jet aircraft are leaving us with no choice but to adjust our business to current market conditions."

Republic currently operates approximately 1,300 daily flights to 117 cities as AmericanConnection, Continental Express, Delta Connection, United Express and US Airways Express. "We will continue working hard to grow our business with larger capacity aircraft and get our people back to work as soon as possible," Bedford said.

Boeing said it realized considerable reductions in fuel consumption and carbon dioxide emissions with its Tailored Arrivals ATM concept, which is based on continuous descent approaches. It said TA approaches can reduce 777 fuel consumption by 34% (1,303 lb.) per approach and by 39% (2,292 lb.) for 747s, according to findings from flights evaluated at San Francisco from Dec. 4, 2007, to March 23, 2008. During the trial, United Airlines, Air New Zealand and Japan Airlines completed 57 flights into SFO using TA approaches, which allow aircraft to use air-to-ground data link technology to descend with minimal direct ATC intervention.

"Concepts like Tailored Arrivals potentially can be deployed quickly and at relatively low cost because the technology is in place today," Boeing ATM VP and GM Kevin Brown noted. "As more airlines and airports use it, we move closer toward realizing the benefits expected from the Next-Generation Air Transportation System." Partial use of TA on 119 additional flights yielded fuel savings of 379 lb. per flight for 777s and 1,100 lb. for 747s. The project employed technologies supplied by US FAA and NASA and is part of an international program to reduce fuel consumption and carbon emissions. TA will be implemented at Miami International later this year through a joint FAA-European Commission initiative to accelerate transatlantic ATM improvements aimed at reducing emissions and noise.

Continental Airlines said it will report a $22 million special gain when it announces its second-quarter results Thursday. The gain is the result of a variety of special items. CO took a $58 million charge representing impairment charges recorded for owned aircraft and related spare parts, including a $51 million writedown in the value of its 737-300/-500 aircraft and related assets (ATWOnline, June 6). It reported a $78 million gain on the $149 million May sale of its remaining stake in Copa Holdings, a $29 million writedown in the value of student loan-related auction rate securities and a noncash income tax credit of $28 million.

United Airlines and the International Assn. of Machinists reached agreement on a voluntary separation program that will be available for up to 400 customer service and ramp employees aged at least 45 and with 15 years of service. UA last month announced plans to cut 1,400-1,600 jobs through 2009 (ATWOnline, June 5).

US FAA said it will award a contract this fall to install Runway Safety Lights at 20 additional airports across the country over the next three years. RSLs, which warn pilots when it is unsafe to cross or enter a runway, are being tested at Dallas/Fort Worth and San Diego and will be installed at Atlanta, Baltimore, Boston, Charlotte, DFW, Denver, Detroit, Washington Dulles, Fort Lauderdale, Houston Intercontinental, New York JFK, New York LaGuardia, Las Vegas, Los Angeles, Minneapolis-St. Paul, Newark, Chicago O'Hare, Orlando International, Philadelphia, Phoenix, SAN and Seattle.

FAA also will provide up to $5 million to test in-cockpit displays that increase runway safety. Funding will cover technology that includes either an aural runway alerting system or an electronic flight bag. The agency said the number of "serious" runway incursions declined more than 55% from FY01 through FY07.

CAAC reported that Chinese carriers transported 14.2 million passengers in June, down 3.8% from the year-ago month, while cargo traffic declined 0.8% to 321,000 tonnes.

Air Berlin said it received permission from German authorities to carry out test flights using its satellite-supported Ground Based Augmentation System installed on 737NGs delivered since June 2007. GBAS approaches will be used alongside standard ILS in Berlin and Malaga. AB said it is the only European airline using GBAS.

ANA will install Airline Partners Boeing blended winglets on its 16 767-300ERs beginning April 1, 2009, as part of a three-year plan to cut CO2 emissions. ANA expects to increase efficiency 5% and save 2,100 tonnes of CO2 per year per aircraft.

Goodrich extended its landing gear overhaul agreement with Continental Airlines to cover 737NG, 767 and 777 aircraft in addition to the 757-200s and 737s already under contract. Addendum is expected to generate $49 million in revenue over five years. Work will take place in Opa-Locka, Fla.

Universal Asset Management announced the purchase of an ex-Champion Air 727-200 for disassembly. Champion ceased operations in May.