Jun 30, 2008

Air France KLM and three other airlines agreed to pay fines totaling USD$504 million to settle US price-fixing charges involving vast shipments of consumer goods ranging from electronics to medicines, the US Justice Department said on Thursday. The plea deal was the latest in

a series of airline cargo price-fixing settlements and boosted the total fines from the US antitrust investigation to a record USD$1.27 billion. Under the new agreement, Air France-KLM will pay USD$350 million, the second-largest criminal fine ever obtained by the Justice Department's antitrust division, the government said in a statement. Air France and KLM operated as separate companies at the start of the price-fixing investigation until May 2004, when they combined under a single holding company. Cathay Pacific will pay a USD$60 million fine while Scandinavian airline SAS will pay USD$52 million and Martinair USD$42 million, the Justice Department said. Jun 27, 2008

Lawmakers in the EU reached an agreement to cap airline emissions in 2012, adding European and foreign carriers to Europe's emissions-trading system. A group representing the world's airlines said carriers cannot afford to participate because of the surging cost of jet fuel, and U.S. airlines also strongly oppose the plan. Meanwhile, the EU has contacted U.S. presidential candidates John McCain and Barack Obama to discuss the plan. Jun 27, 2008

Airlines on Thursday said an EU proposal to include carriers in an emissions trading scheme would add billions to the cost of air travel and limit mobility. They said emissions could be reduced instead by uniting air service providers. Jun 26, 2008

A new rule backed by EU lawmakers would require advertised air fares to include all taxes and charges in all of the EU's member countries. An EU investigation found that misleading conditions have become a problem on travel Web sites. Jun 25, 2008

Information technology must deliver solutions to drive down costs, improve passenger convenience and provide enhanced possibilities to maximize airline revenues, said Giovanni Bisignani, director general and CEO of the International Air Transport Association (IATA). Bisignani made his remarks in the opening keynote address at the SITA Air Transport IT Summit in Brussels. IATA's Fast Travel will deliver a second revolution with baggage self-tagging, automated document checks, self-boarding and kiosks to handle irregular operations and mishandled baggage reporting. Bisignani also urged progress in other key areas, including security, air traffic control and GDS's. Jun 24, 2008

Aer Arann, Aer Lingus

Aer Arann and Aer Lingus will interline on the former's five-times-daily flights between Cork and Dublin and the latter's US services. Jun 26, 2008

AirBerlin, Condor Airlines

AirBerlin is reconsidering its acquisition of Condor Airlines from Thomas Cook, CEO Joachim Hunold said at AirBerlin's annual shareholder meeting this week, according to Reuters. The deal was announced last fall. AirBerlin was scheduled to acquire 75.1% of Condor next February and the remaining share in February 2010. Thomas Cook would receive 29.9% of AB worth A475 million plus an additional A120 million in cash, the news service confirmed. Jun 25, 2008

Alitalia

Italy's latest plan to salvage Alitalia includes a fresh capital injection before resuming the hunt for a partner, its chairman said, in the first hint of how the government hopes to settle the airline's fate. After two failed attempts to sell its controlling stake in the near-bankrupt carrier, Italy's government last month embarked on its latest effort to settle the airline's fate but has said little on what shape the plan could take. Italy's Economy Minister Giulio Tremonti told a parliamentary hearing that Air France-KLM had begun "actions" related to Alitalia, which an Italian Treasury source said were legal actions after its takeover of the carrier fell apart. Tremonti later said he was not aware of any legal actions by Air France-KLM against Alitalia but that the French airline had made "evaluations" on the Italian carrier's "industrial future". He did not elaborate further.Earlier on Wednesday, Chairman Aristide Police told reporters on the sidelines of a meeting with Italy's civil aviation agency that he was confident a "very full vision" for the airline backed by unions would be ready by end-July. Tremonti, however, said sale adviser Intesa SanPaolo had been given two months to complete its job of formulating a plan to rescue the airline. Jun 27, 2008

Alitalia

Italy's civil aviation authority called a meeting with Alitalia Chairman Aristide Police for Wednesday morning to discuss the flag carrier's financial situation. In addition to an update, ENAC said it wants to be briefed on how Alitalia plans to manage the summer traffic increase. Jun 23, 2008

Alitalia

The Italian Senate last week officially approved the EUR300 million bridge loan to Alitalia. The European Commission is investigating whether the loan represents an unauthorized state subsidy to the carrier, which remains 49.9% owned by the Italian state. Alitalia will hold its shareholder meeting on June 28. Will this never ending confused financial mess ever end? Jun 23, 2008

Austrian Airlines

Austrian Airlines Group CCO Andreas Bierwirth said the carrier is considering establishing an even greater presence in Central and Eastern Europe. It already holds a 22.5% share in Ukraine International Airlines and would strengthen its foothold with investments in other carriers in the region and Austrian will be more assertive in the region. Austrian faces tough competition at home from LCCs. It has said it may lose as much as EUR90 million this year and is willing to consider investment by a larger strategic partner. Launching its own low-cost operation is not a viable option at the moment, although its Lauda Air leisure subsidiary might offer an outlet. He said Lauda "is very successful" selling seats online and that it may be used on more price-sensitive routes such as to Innsbruck or Berlin. Jun 23, 2008

bmi

British airline bmi is likely to be taken over next year despite the possibility it will make a loss in 2008, as a host of rivals eye up its portfolio of London Heathrow slots. The carrier, 50 percent (plus one share) owned by entrepreneur Sir Michael Bishop, has long been expected to change ownership in 2009 due to a private agreement between Bishop and 30 percent (minus one share) co-owner Lufthansa. Bishop has the option of placing his majority share of the airline with Lufthansa, while a source familiar with the situation said the German carrier can also 'call in' the stake - both for a pre-set price agreed nearly a decade ago. Lufthansa has been reluctant to commit to the move -- despite consolidation being seen as a way airlines can cope with the tough environment. However, analysts and other airlines said Lufthansa would not be short of potential partners if it completed the deal, making it 'kingmaker' if it did not want full ownership. Jun 27, 2008

Iberia

Spanish airline Iberia will put the brakes on a planned fleet expansion due to higher fuel prices, Expansion newspaper reported on Friday, citing unnamed sources close to the company. The flag carrier will also further reduce its domestic and European flights to focus on Latin American routes over the next three years, Expansion reported. An Iberia spokeswoman said the airline's strategic plan for 2009 to 2011 was still being worked on and should be ready by September. She said market conditions had changed over the last few months and this would be reflected in the plan, but declined to comment further. The twin threats of high fuel and an economic downturn are forcing many airlines to shrink operations. Brokerage BPI said on Friday cutting the fleet would not be enough for Iberia. Jun 27, 2008

Lufthansa

Lufthansa Group airlines flew 13.61 billion RPKs in May, up 27.1% year-over-over. Capacity increased at the same rate to 17.33 billion ASKs, leaving load factor level at 78.6%. Jun 27, 2008

Lufthansa

Lufthansa yesterday said it still expects its 2008 operating profit to match the EUR1.38 billion ($2.15 billion) reported in 2007 despite an economic environment that "represent[s] a considerable challenge for the airline industry." It expects fuel costs to reach approximately EUR5.6 billion this year but is confident. Jun 25, 2008

Lufthansa

Lufthansa suffered a 4-hr. wildcat strike by 250 ground workers yesterday in Dusseldorf that resulted in the cancellation or delay of 30 flights, the ver.di union said. It staged a similar walkout last week and said it is seeking a 9.8% pay increase over a one-year period for ground and cabin crew, while the airline offered increases of 3.4% and 2.1% over 19 months. Jun 24, 2008

Norwegian Air Shuttle

Budget airline Norwegian Air Shuttle is seeking further cost cuts, including reducing flights, to offset the impact of high oil prices Norwegian said on Friday it was still calculating the financial consequences of its plan, which involves fewer flights and lower flight speeds. Norwegian also said it was gradually replacing old aircraft with newer and more efficient models, she said. Norwegian Air, which also serves the community of migrant workers flying between Norway and Eastern Europe, had a loss before interest, tax, deprecation and amortization of NOK226 million kroner (USD$44.68 million) in the first quarter of 2008. When it reported the first quarter loss in April, it said rising fuel costs would significantly affect costs in the coming quarters, adding that it had no fuel hedges. Jun 27, 2008

SAS Scandinavian

The chief executive of SAS Scandinavian said the airline industry will see really challenging times this year and next due to high oil prices and overcapacity problems." There will be short-term rescue actions, drastic measures," SAS chief executive Mats Jansson told Norwegian daily Dagens Naeringsliv about the airline industry as a whole. He said a "deadly cocktail" of factors were combining to weaken the airline industry. "This is worse than after 9/11, worse than during the oil crisis of the 1970s," he said. SAS, which had a net loss of SEK973 million kroner (USD$162 million) in the first quarter, has embarked on a strategy to cut costs and boost profits, including grounding 11 aircraft in 2008. "The fleet must be renewed over time. A result of seven percent of sales is needed for us to manage the necessary investments and secure our future independence," Jansson said. He said airlines which had ordered more planes during the industry's upswing several years ago and were only receiving them now, were living dangerously. Jun 27, 2008

SkyEurope Airlines

SkyEurope Airlines added Vienna-based ASP as an investor. The firm purchased 7.24% of the LCC on the bourse for approximately A7 million ($10.9 million). ASP reportedly was attracted by the fact that SkyEurope has reduced its costs 17.7% over the past six months. However, it still faces a first-half loss of around A28.5 million. Jun 24, 2008

Sterling Airlines

Nordic low-cost airline Sterling on Friday said it would cut about 20 percent of its about 1,000 pilots and cabin crew to combat the effects of a deteriorating business environment.The Icelandic-owned airline said it would no longer staff its bases permanently at Aalborg and Billund in Denmark, and Malmo and Gothenburg in Sweden from January 1 2009, consolidating staff instead into its bases in Scandinavian capitals Stockholm, Oslo and Copenhagen. Sterling Chief Executive Reza Taleghani said he hoped to achieve the cuts mostly through voluntary redundancies and would seek to maintain some flexibility to expand again next year should the market permit. Taleghani said the planned reduction in number of seats was about 14 percent, adding the airline was already staffed for more aircraft than it operated. Sterling flew 4.4 million passengers last year and cut its operating loss to DKK4.5 million Danish kroner ($949,700) from DKK182.4 million in 2006. Jun 28, 2008

ZZ

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