Archive for July, 2009
BRIDGETOWN, Barbados, July 27, 2009 – The Barbados Tourism Authority (BTA) is expecting a positive stream of visitor arrivals from South America following the commencement of the Linea Turistica Aerotuy charter service to Barbados from Caracas.
The twice weekly service on the 46-seater ATR-42 aircraft will leave Barbados on Sundays at 9:30 pm; then from August 1st through to December, the schedule will be adjusted with flights arriving on Mondays and Thursdays.
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Among the passengers on board the recent inaugural flight was the airline’s president, Juan Carlos Marquez, who said the service had been a dream for a long time.
“I have been with the company for 20 years and we have been waiting for the right airplanes in order to start this service. We bought the planes last year and completed the certification and acquired the permits this year to bring us to this point. We are delighted to be able to make a positive contribution to both destinations and the chance to enhance our offering to the world by working together,” he said.
BTA’s senior business development manager for Caribbean and Latin America, Linda Christian-Clarke, added: “We’re very pleased that the charter has started as it holds potential to bring visitors from Venezuela and from other connecting gateways such as Argentina and other South American countries.”
The BTA began building anticipation among key media trade partners in Venezuela around the service as early as March 2009 when Christian-Clarke hosted a team from Venezuela including journalists, travel agents and tour operators who were all given a comprehensive tour of Barbados accommodation, golf, heritage and culinary product.
LONDON (July 26, 2009) – Instead of dampening travel for its citizens and curbing the flow of tourism cash for developing countries, the British and other G-20 Governments should offer cash incentives to its travelers who visit climate-friendly destinations, proposed a development expert.
Speaking at a high-profile panel organized by the UK Tourism Society, Lelei TuiSamoa LeLaulu said the new Airline Passenger Departure tax leveled by the UK Government was hindering development in poorer nations by drastically reducing the number of British tourists to the developing world.
“British tourists take and leave more cash to island nations and most developing countries than the UK Government gives in aid,” asserted LeLaulu, chairman of the Foundation of the Peoples of the South Pacific International (www.fspi.org.fj), the largest non-government development agency in Oceania.
LeLaulu was speaking at the Tourism Society debate with the UN World Tourism Organization regarding stimulus for G-20 economies. The high profile panel debate looked at the implications of the G-20 Summit outcomes on the international tourism industry.
“Tourism is the largest voluntary transfer of resources from the rich to the not-so-rich in history,” asserted LeLaulu, “and for the most part these tourism dividends go straight to benefit the communities which host the visitors.”
Questioning the UK government’s taxing of travelers for their carbon emissions, LeLaulu asserted the Green Globe sustainability index indicates European and North American travelers emit less carbon in developing world destinations than they would if they stayed in their own countries, “so UK citizens would be more climate friendly in Samoa or St. Lucia, for example, than they would be at home.”
“Instead of deterring travel with these curious taxes, the British and other G-20 governments should issue vouchers worth US $1,000 to citizens of their countries who visited destinations which were climate friendly,” he suggested.
“These vouchers could not be used on European airlines but would be cashed in when it was proved the money was used in climate-friendly hotels and other amenities at developing country destinations,” he said. “Since the recession is caused in part by people not using their savings,” he said, the G-20 economies would be stimulated “when people took money from their savings to pay travel agents and for tickets on their struggling airlines.”
LeLaulu was part of a panel which included Lord Thurso MP, Liberal Democrat Shadow Secretary of State for Business, Enterprise and Regulatory Reform; Dr. Taleb Rifai, Secretary General for the UNWTO, Christopher Rodrigues OBE, Chairman of VisitBritain; Marthinus Van Schalkwyk, Minister of Tourism of the Republic of South Africa; and Professor Geoffrey Lipman of the Christel DeHaan Tourism & Travel Research Institute and Assistant Secretary General of the UNWTO.
July 27, 2009–Virgin Blue, Australia’s second-largest airline, is looking to raise AUD$231.4 million ($USD190 million) in a heavily discounted share sale after warning on Monday it was likely to post a full-year loss.
The airline said the money would help bolster its capital position after it suffered the worst operating environment in its 10 year history over the last 12 months, with the global industry suffering from a slump in business and leisure passengers.
Despite the downturn it has invested heavily on expansion this year, flying to the United States and adding new domestic routes while cutting capacity on existing routes.
“These are the worst of times we’ve had in a long time,” chief executive Brett Godfrey told reporters.
He said the size of the capital raising assumed dire market conditions would persist into next year. The money would also strengthen Virgin Blue against any new competition and ahead of a short-haul fleet renewal starting in 2011, he added.
Virgin Blue needs to replace 12 Boeing 737s as their leases expire in 2011 and another dozen planes in 2012.
“Now’s a good time to horde cash when you can,” Godfrey said.
Virgin Blue said it would not pay a final dividend this year to help conserve cash.
It is set to post a loss of AUD$160 million – AUD$165 million for the year to June 2009, down from a net profit of AUD$98 million a year ago.
It said it expected to break even in fiscal 2010, which one analyst, who declined to be named, said could turn out to be a conservative forecast if Virgin Blue was able to maintain the stronger yields it had achieved in July into 2010.
Godfrey, who has led the company from its launch, said he would step down in 2010 as he felt he had given the airline enough “blood, sweat and tears” over the past decade.
The share sale includes a placement to institutions to raise AUD$21 million and a 1-for-1 non-renounceable entitlement offer to raise about AUD$210.4 million, both priced at 20 cents a share compared with Virgin Blue’s last trade at 29 cents.
Analysts said the offer price was attractive, at nearly half the price-to-earnings multiple of bigger rival Qantas Airways, based on forecast profits for 2011.
“If you’re a holder, it’s a great price,” said John Grace, a portfolio manager at Ausbil Dexia, which is not an existing shareholder. But he added that Ausbil was unlikely to buy into the placement as it was not putting money into airlines at all.
The offer is fully underwritten by JP Morgan and Credit Suisse.
Richard Branson’s Virgin Group has agreed to invest up to AUD$80 million, taking up its full entitlement of 25.5 percent plus 35 percent of the share placement and sub-underwriting 20 percent of the retail component of the entitlement offer.
If retail investors do not take up their entitlements, Virgin Group’s stake in Virgin Blue would increase to 30.2 percent.
(Reuters)
Jul 26, 2009 — Somewhere in Washington, there’s probably a bucket with some airlines’ names on it.
After all, taxpayers have bailed out banks, insurance companies, automakers, Wall Street and mortgage lenders. Can America’s foremost frequent failers be far behind?
The second quarter is supposed to be the highlight of the airlines’ year, the period when planes are stuffed with leisure travelers and travel demand is at its peak. This year, though, the recession, the swine flu scare and rising fuel prices have hammered results.
Houston-based Continental Airlines, for example, posted a $213 million loss last week as revenue plunged 23 percent. The airline also said it planned to shed 1,700 jobs.
And that’s what passes for good news, because Continental remains in better financial shape than many of its rivals. American, United and US Airways may need additional cash to keep flying beyond the end of the summer, JPMorgan analyst Jamie Baker wrote recently.
“Even a seemingly miraculous surge in demand wouldn’t negate the necessity for significant incremental capital,” he said.
Where will the additional capital come from? Bond investors are showing little interest in pouring more money into the carriers. Rates for credit-default swaps — which shield investors from losses if the airlines are unable to repay their debt — have been rising steadily for the parent companies of American and United, Bloomberg News reported. Rising swap rates are a sign that bond investors are increasingly wary the two carriers will default.
Last week, Moody’s Investors Service cut the debt ratings for industry stalwart Southwest Airlines to the lowest grade above junk. Meanwhile, Standard & Poor’s placed the ratings for American and United, which already are below the junk threshold, on its watch list with negative implications, citing concerns about liquidity and declining revenue.
Typically, at this stage in the airlines’ cycle of despair, the weaker carriers flock back to bankruptcy court like the swallows returning to Capistrano.
This time, though, things are different. Most of the industry has been through bankruptcy in the past few years. Most of the major airlines’ costs are within about a penny per mile for each available seat, and another trip through bankruptcy probably won’t reduce them significantly as it has in the past.
“It isn’t clear what Chapter 11 offers,” Baker wrote.
So if the courts can’t help, might we actually see one or two of these perpetually troubled airlines go out of business?
Don’t count on it. It’s unlikely that lawmakers and the administration, facing stubborn unemployment numbers, are going to allow tens of thousands of airline workers — many of whom are unionized — to lose their jobs. Expect, at the least, government-backed loan guarantees to help carriers shore up their balance sheets with fresh capital.
Meanwhile, Wall Street — lured by the siren song of investment banking fees — likely will once again call for mergers of the damned, extolling the benefits of, say, a combined United-US Airways, even though about two dozen airline mergers during the past three decades has yet to produce a single success.
None of this will solve the airlines’ problems, merely perpetuate them. The airline industry has long cheated the consequences of competition.
If Washington really wanted to help, it would do nothing. It would turn a deaf ear to the pleas of the beleaguered carriers, allowing the chance that maybe, just maybe, one or two of them will actually stop flying and enable the surviving airlines a shot at sustained profitability when the recession’s over.
It’s time to stop the insanity. In the airline industry, failure isn’t an option, it’s a necessity.
Source: chron.com
Wed Jul 22, 9:46 BRUSSELS – Hard-hit European airlines said Wednesday that airport fee hikes are hurting their ability to weather the economic crisis as passenger numbers plunge.
The Association of European Airlines said airports “could do with a reality check” when they increase the fees each passenger must pay on top of their air fares. This is holding back airlines’ ability to boost travel with lower prices, it said.
The group — which represents major carriers such as British Airways and Lufthansa — said German airports are leading the charge with higher fees at Frankfurt and Munich and others are reconsidering fee freezes.
“Customers are struggling to survive in the current market and the very last thing they need is a cost increase,” said the AEA’s Ulrich Schulte-Strathaus.
Europe’s busiest airport London Heathrow is also planning to increase fees to pay for new infrastructure and to cope with the recession-driven drop in air traffic. Copenhagen will reinstate fee increases by the end of 2009.
Low-cost carrier Ryanair — not an AEA member — blamed higher fees at British airports for a decision to trim flights next winter
Thu Jul 23, 12:38–TEMPE, Ariz. – US Airways says it will provide in-flight Internet service beginning early next year in a deal with provider Aircell. The service announced Thursday will include Web browsing, instant messaging, e-mail1313131313131313131313131313131313131313 and VPN access for purchase by passengers with laptops or other Wi-Fi devices.
Prices will range from $5.95 to $12.95, depending on the length of the flight and the type of device used by the passenger.
Aircell’s Gogo service will be installed first on US Airways’ Airbus A321 aircraft on some domestic routes.
US Airways plans eventually to let passengers check whether access will be available on their flight by looking for a Wi-Fi icon when booking on the airline’s Web site.
Several other airlines, including Delta and American, have already begun equipping some planes with Internet access using Aircell’s Gogo. Southwest is testing a system from a rival supplier.
July 24, 2009–American Airlines said on Friday it would raise by USD$5 the fee it charges to check in a first or second bag on domestic flights.
The new charges apply to tickets purchased on or after August 14. The higher fees will extend to American’s regional partner American Eagle.
The fee to check in a single bag will be USD$20, and the fee to check in a second bag will be USD$30.
US airlines, struggling to bolster revenue, have begun charging fees for items and services that used to be complimentary.
Earlier this week, Continental Airlines said it would raise its check in bag fee on domestic routes by USD$5, effective August 19, and said that other initiatives to raise revenue would follow.
(Reuters)
July 24, 2009–The US FAA on Thursday proposed mandatory safety measures designed to prevent the accumulation of ice inside the pipes of the fuel systems in certain Boeing 777s.
The Federal Aviation Administration proposed these new measures in response to a British Airways accident last year and would require Boeing install redesigned cooling systems on some of its jets with Rolls-Royce-made engines by January 2011.
The accumulation of ice can “result in an unacceptable engine power loss, and loss of control of the airplane,” the FAA said in its proposal.
“The conditions that seem to have led to the British Airways accident are rare to start with, and the non-normal procedures we have in place will serve to minimize the effects these conditions will have on airplanes in flight until the new FOHEs (fuel-oil heat-exchangers) are installed,” a Boeing spokeswoman said.
There are about 220 Rolls-Royce-powered 777s in service, of which 50 operate in the United States and are therefore affected by the FAA’s proposal, Boeing said.
In January 2008, British Airways flight BA38 crashed into the ground at London’s Heathrow Airport when both of the plane’s engines reduced their thrust unprompted by the pilots. All passengers survived the incident.
The deadline for comments on the FAA’s proposal is August 24.
(Reuters)
ST JOHN’S, Antigua, July 23, 2009 – Antigua-based regional airline LIAT has started advertising for a new boss, three months after temporarily replacing former Chief Executive Officer (CEO) Mark Darby.
Brian Challenger is currently in charge of the day-to-day operations of the company. When he was appointed on April 22nd, LIAT’s Board of Directors said he would remain there until a new boss was identified and put in place.
In a newspaper ad published yesterday, LIAT said it was looking to hire a CEO on a three-year contract.
That person’s role will be to “implement the strategic goals and objectives of the Board of Directors of LIAT for leadership, management and administration of the company”.
The closing date for applications will be August 15th.
LIAT’s search for a CEO began after the Board fired Darby on April 21st, over his payment of merit awards to some of the airline’s employees without approval
July 23, 2009–Air France-KLM posted a 20.5 percent drop in fiscal first-quarter sales on Thursday as the continuing deterioration in the economic climate hurt demand for air travel and air freight.
Revenue totalled EUR5.19 billion euros in the three months to June 30, Europe’s biggest airline said in a statement.
Sales in the carrier’s passenger business fell 18.7 percent to EUR4.01 billion on the back of a 4.7 percent reduction in capacity, a 5.8 percent drop in traffic and a 14.5 percent decline in yields, the airline said.
Cargo revenue dropped 41.5 percent to EUR544 million due to a decline in traffic of 22.7 percent, a 17.2 percent cut in capacity and a 25.1 percent fall in yields.
“We maintain our assumption of a more limited deterioration in the second quarter and stability in the last two quarters, with even a slight improvement at the end of the year compared with the second half 2008-09, itself already impacted by the crisis,” Air France-KLM said.
The airline said the trend of the first three months of 2009 had continued in the fiscal first quarter.
(Reuters)