NewsBriefs
Airline heavyweights look
to lead on emissions
Air France KLM, British
Airways, Cathay Pacific
Airways, Virgin Atlantic Airways
and UK airports operator BAA
announced formation of the
Aviation Global Deal Group,
which expressed its support
for inclusion of carbon dioxide
emissions in a “new global
climate deal” scheduled to
be discussed at December’s
UN climate summit in
Copenhagen.
Meeting in Hong Kong
on Feb. 12, AGD argued for
a “fair and effective global
policy solution” on aviation
emissions, which were not
included in the 1997 Kyoto
Protocol and are not managed
under any current global agreement. ICAO, which the group
supports, is working on its own
cap-and-trade plan while the
EU plans to include aviation in
its ETS from 2012
The four airlines and BAA
said any global emissions
policy must “offer genuine
environmental benefits . . . be
operationally and economically
sound . . . maintain competitiveness between airlines and
avoid market distortions . . .
[and] balance the social and
economic benefits of flying
with the industry’s responsibility to cut global emissions.”
EC has ‘doubts’ on
Austrian-LH deal
The European Commission
opened its formal investiga-
tion into the privatization
and restructuring of Austrian
Airlines Group, including its
sale to Lufthansa, expressing
“doubts that the price to be
paid by Lufthansa reflects the
market price for what is being
sold.” Its “doubts” also cen-
tered on whether “the Austrian
state has acted as private inves-
tor and whether the restructur-
ing plan . . . is in accordance
with the [EU] framework for
rescue and restructuring of
firms in difficulty.”
Air France KLM, which was
interested in acquiring AAG,
confirmed it filed a complaint
with the EC over the terms of
the deal under which state
holding company OIAG agreed
to sell its 41.6% share to LH.
Meanwhile, in early February
OIAG CEO Peter Michaelis said
he could not “rule out that
possibility” that AAG could
become insolvent if the deal
is disapproved. In late January
the EC authorized what it
called “rescue aid” for AAG in
the form of a €200 million loan
facility guaranteed by OIAG.
Also in January, Alfred
Oetsch resigned from the
CEO post at Austrian. COO
Peter Malanik and CCO
Andreas Bierwirth are sharing
CEO duties until a successor
is named.
In related news, the EC
opened an in-depth investigation into LH’s proposed take-over of Brussels Airlines parent
SN Airholding because of
competition concerns on several routes between Belgium,
Germany and Switzerland.
Lufthansa proposed remedies
but they were not “sufficiently
clear-cut” to alleviate its
doubts, the EC said.
Aircraft deferrals,
cancellations rise
The industry downturn and
credit crunch are nibbling into
manufacturers’ record backlogs
and causing them to ponder
production cuts. Boeing has
lost orders for at least 31 787s
so far in 2009, while Airbus
reported 12 cancellations for
A320 family aircraft against
four orders in January.
According to Boeing CFO
James Bell, the company has
seen cancellations and deferrals “pick up significantly in
the first month of this year.”
Boeing also is paying a price
for Dreamliner delays. Last
month LCAL, the Dubai-based
lessor established in 2004 to
buy and lease 787s, cut its
order from 21 units to five.
The 16 cancellations, valued
at $2.8 billion, followed on
an earlier announcement by
Russia’ S7 that it had cancelled its order for 15.
Speaking at a financial
conference in New York last
month, Bell said the manufac-
turer is still planning for “sta-
ble production rates as a base-
line” in 2009 and beyond. But
he added that there is a risk
“that we might have to make
modest production cuts begin-
ning in 2010.”
With capital scarce, the
French government report-
edly is set to lend French banks
€ 5 billion ($6.5 billion) with
the understanding that the
funds will be used to finance
aircraft purchases. Airbus said
it welcomed the move (see
related article, p. 35).
UK ponders limiting
leisure flying
The UK’s so-called “
environment czar” in February raised
the possibility of rationing air
travel, limiting UK citizens
to just “a few vacation trips”
abroad by air per year in order
to reduce CO2 emissions.
Adair Turner, chairman of
the independent Committee
on Climate Change that
advises UK Prime Minister
Gordon Brown, made the
proposal before Parliament’s
Environmental Audit Select
Committee on Feb. 5. In
remarks widely reported by UK
media, Turner said, “We will
have to constrain demand in
an absolute sense with people
not allowed to make as many
journeys as they could in an
unconstrained manner.”
Alliances draw concern
in Congress
Stating that he was “increas-
ingly concerned with the
decline of competition in
international markets,” US
House of Representatives
Transportation and
Infrastructure Committee
Chairman James Oberstar
(D-Minn.) last month intro-
duced legislation to require
the US Dept. of Transportation
to review and renew airline
alliances’ antitrust immunity
every three years. The measure
also would mandate a govern-
ment study to determine how
much consumers benefit from
immunized alliances.
Sky Team and Star Alliance
currently enjoy immunity, while
oneworld members American
Airlines, British Airways and
Iberia are seeking it. In addition, Continental Airlines,
which plans to jump from
Sky Team to Star later this
year, is seeking immunity for
its dealings with Star carriers.
But Oberstar complained that
transatlantic competition will
be “largely reduced” to just
the three alliances if immunity
is granted to oneworld.
ASIA/PACIFIC
Report
» Japan Airlines parent JAL
Group reported a net loss of
¥ 38. 5 billion ($428 million)
for its fiscal third quarter
ended Dec. 31, reversed from
a ¥ 13. 1 billion net profit in
the year-ago period, citing a
“downward slide” in demand
driven by yen appreciation and
“volatile” fuel prices.
Revenue declined 13% to
¥485.7 billion while expenses
lowered 1.4% to ¥524.7 billion, leading to an operating
loss of ¥ 39 billion, reversed
from an operating profit of
¥ 25.9 billion in the year-ago
period. JAL projects a ¥ 34 billion net loss for the fiscal year
ending March 31.
Ahead of the results
FINANCIAL RESULTS, NEW DEALS, AND REPORTS FROM EVERY CORNER OF THE GLOBE
First 777-300ER for V Australia Airlines was delivered in
early February. It is leased from ILFC. V Australia was set to
launch service between Sydney and Los Angeles Feb. 27.
(see Waypoints, p. 21)
» FIRST DELIVERY, LAUNCH TO FOLLOW