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Wednesday May 28, 06:52 PM

 

 

Qantas cuts capacity due to fuel prices

Qantas Airways Ltd will axe services, shed jobs and retire old planes in a bid to cope with skyrocketing fuel prices.

 

The airline said it would have to look harder at its business, including cutting staff numbers, in order to deal with an expected $2 billion increase in its fuel bill next financial year.

 

Mirroring moves by other airlines around the world, Qantas said it would reduce capacity by five per cent - the equivalent of grounding six aircraft.

 

The carrier's Gold Coast to Sydney and Ayers Rock to Melbourne routes will be the first to go, followed by Jetstar's exit from the Sydney to Whitsunday Coast, Adelaide to Sunshine Coast and Brisbane to Hobart routes in July.

 

Capacity will be reduced on Qantas' Ayers Rock to Sydney services and Jetstar will scale back services on some Adelaide, Avalon and Cairns routes by August.

 

Qantas said further cuts and changes to its international routes would be announced within the next week.

 

Qantas chief executive Geoff Dixon said the magnitude of the changes called for a reduction in staff numbers, and the carrier had already launched an accelerated leave program to mitigate the requirement for redundancies.

 

The company did not say how many jobs would be lost.

 

"The fact is that fuel prices are something we have no control over, so we have to look harder at areas we do have control," Mr Dixon said.

 

Despite the introduction of fare increases and new charges and fees, Qantas said it was not staying ahead of the rising cost of fuel.

 

"Despite our fuel hedging strategy, fuel surcharges, two separate across-the-board fare increases and a recruitment freeze, we are not bridging the widening gap between the actual increase in the cost of fuel and the amount we offset," Mr Dixon said.

 

Under the cost cutting plan, Qantas will also retire one Boeing 737, accelerate the retirement of four B747-300s by December and ground two B767s.

 

A Jetstar A320 will also be grounded and Qantas will cancel the delivery of one Jetstar A321 plane.

 

Qantas also plans to freeze pay for all of its senior executive group and defer the normal July pay review for the remaining 1,000 executives.

 

Despite the measures, Mr Dixon said Qantas remained a fundamentally strong company, with a good balance sheet and an investment commitment that included a $35 billion order for aircraft.

 

"We must make these hard decisions now, however, if we are to ensure the ongoing strength of Qantas, preserve the jobs of the vast majority of our current workforce, and position ourselves for growth when the trading environment improves," he said.

 

Merrill Lynch research analyst Kevin O'Connor said Qantas' plans reflected moves by other airlines across the globe.

 

"Worldwide you have seen a number of airlines talk about capacity cuts - in the US, NZ, Europe and Asia," Mr O'Connor said.

 

"The simple fact is that because of rising fuel prices they need to push up ticket prices.

 

"You cannot push up ticket prices in a softening economic environment unless you start tightening up capacity."

 

Mr O'Connor said this was not a good signal for the low cost travel industry.

 

"We had two decades of relatively cheap oil - we are now in a situation where we don't.

 

"When oil prices go from $US20 to $US120 a barrel that is going to feed through to ticket prices and when you push up prices some people won't travel or they won't travel as much."

 

Air New Zealand also responded to higher fuel costs, downgrading its full year earnings forecast to at least 25 per cent below last year's level.

 

 

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Finnair Pilots Reject Pay Deal

 

May 28, 2008

The pilots of Finland's national carrier Finnair on Tuesday rejected a pay deal proposed by the national mediator, the head of the employers' organization said.

 

"The employer was ready to accept the deal, but pilots refused it," said Peter Forsstrom, a senior official from the employers' organization Palvelualojen Toimialaliitto. :blink:

 

Forsstrom said there was no schedule for further talks with the pilots, who had not announced plans for industrial action.

 

He said the proposal would have included pay increases of 5 percent, 4 percent and 3.1 percent per year for the next three years, with some additional terms meaning a total cost impact of about 15 percent. Pilots are asking for over a 24 percent increase for the three year period, he said.

 

Glitnir said in a research note on Tuesday that a 15 percent pay increase would dent Finnair's annual operating profit by EUR20 million euros (USD$32 million), starting next year.

 

(Reuters)

 

British Airways To Buy Two Airbus A318s

 

May 28, 2008

British Airways has signed a firm contract for two Airbus A138 aircraft to launch a service between London City Airport and New York, Airbus said on Tuesday.

 

No financial details were disclosed.

 

(Reuters)

 

 

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British Airways To Move Final Flights To T5

 

May 28, 2008

British Airways said on Wednesday it would move its remaining long-haul flights to Heathrow's new Terminal 5 building in two phases before the end of the year.

 

In a joint statement with Spanish-owned airports operator BAA, the British carrier said it would transfer 30 more daily departures and arrivals to T5 from September 17, followed by a final 15 by the end of October.

 

It said earlier this month it would start moving a new phase of long haul flights to the new terminal on June 5, having delayed original plans amid the chaos that accompanied the terminal's opening at the end of March.

 

(Reuters)

 

American To End JFK-Stansted Service

 

May 28, 2008

American Airlines will end service between New York's JFK Airport and London's Stansted Airport as part of a plan to cut capacity to better cope with high fuel prices.

 

The Stansted service will end on July 2, but American will continue to offer service between JFK and London's Heathrow Airport, AMR said.

 

The news comes a day after American said it would end Chicago flights to Honolulu and Buenos Aires.

 

The cuts are part of an effort by American to cut capacity and better manage fares and operations. Last week it said it would reduce domestic capacity by 11 percent to 12 percent.

 

The airline industry is battling rising fuel costs and a weakening economy that threatens to erode travel demand.

 

AMR said it would make further cuts to its schedule in other markets and retire 40 to 45 mainline aircraft and 35 to 40 regional jets.

 

(Reuters)

 

Iberia And SAS Question Chance Of Spanair Deal

 

May 29, 2008

Spain's Iberia said on Thursday its bid for Spanair was under question given hard times for the sector, while seller SAS said it would cancel the sale if no deal was struck by July 1.

 

Airlines around the world have been hit in recent months by a jump in oil prices and a slowdown in economic growth, making Iberia's offer more expensive than when the Spanish carrier's board approved a bid in February.

 

"The truth is the clock is ticking. The environment is changing. We have to consider what is the future of our offer within this new market environment," Chairman Fernando Conte told a news conference before the annual shareholders meeting.

 

His comments suggest that Iberia is unlikely to raise its undisclosed bid for Spanair, Spain's second biggest carrier.

 

Shortly after, Scandinavian carrier SAS said it might abandon its plan to sell Spanair if it was unable to carry out a deal before the end of the second quarter.

 

"If SAS does not reach a satisfactory solution regarding the divestment, SAS will abandon the current sales process and continue as a shareholder committed to ensure a profitable Spanair," an statement from the Stockholm-based airline said.

 

Other possible bidders include charter airline Gadair as well as a group of Catalan businessmen in partnership with an industrial investor, Spanish media have reported.

 

Conte painted a grim scene for airlines that have had to contend with oil prices more than doubling over the last 12 months and an economic slowdown that has prevented them passing on much of the rise to passengers.

 

"The price per barrel is over USD$130 and this creates a dramatic situation for the sector," he said, but declined to say by how much the airline might increase fuel surcharges. "It's going to depend on the response of the market, on the strength of demand. It is a question that we still don't have an answer to."

 

Finance director Enrique Dupuy said Iberia was looking to hedge its 2009-2011 fuel needs at between USD$110 and USD120 a barrel.

 

The airline currently has 48 percent of its 2008 fuel needs hedged at around USD$83 per barrel, he said.

 

Merger talks between shareholders of Spanish low cost airlines Vueling and Clickair -- 20 percent owned by Iberia -- were "very advanced", Conte said.

 

"Talks between the shareholders in the two companies are going well," he said, though the parties had to draft a memorandum of understanding to jump various regulatory hurdles.

 

"I believe we are very close at this point."

 

In contrast, Conte said Iberia had "absolutely no interest" in the privatization of Italy's Alitalia.

 

(Reuters)

 

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AA's JFK-STN service didn't last long at all! :blink:

 

They're downsizing their SJU hub and I'm having a fun time reissuing a an open dated RTW ticket which has segments that now no longer exist. :angry:

Edited by Keith T

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AA's JFK-STN service didn't last long at all! :blink:

 

Think they only operated this route just to 'pester' Maxjet and Eos; since these are gone now, no need to fly to this 'weird' LCC-airport and they can concentrate on LHR ;)

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Iberia Pulls Out Of Spanair Deal

 

May 29, 2008

Iberia said on Thursday it would drop its bid for Spanair, shortly after the chairman said Iberia was rethinking its stance on the offer because of hard times in the sector.

 

Iberia said in a statement released to the Spanish stock exchange after the market closed it would withdraw its bid because there was no agreement on conditions linked to the deal.

 

Airline shares around the world have been hit in recent months by a jump in oil prices and a slowdown in economic growth, making Iberia's offer more expensive than when the Spanish carrier's board approved a bid in February.

 

"The truth is the clock is ticking. The environment is changing. We have to consider what is the future of our offer within this new market environment," Chairman Fernando Conte told a news conference before the annual shareholders meeting.

 

Shortly after the comments, Scandinavian carrier SAS said it might abandon its plan to sell Spanair if it was unable to carry out a deal before the end of the second quarter.

 

"If SAS does not reach a satisfactory solution regarding the divestment, SAS will abandon the current sales process and continue as a shareholder committed to ensure a profitable Spanair," a statement from the Stockholm-based airline said.

 

Other possible bidders include charter airline Gadair as well as a group of Catalan businessmen in partnership with an industrial investor, Spanish media have reported.

 

Conte painted a grim scene for airlines that have had to contend with oil prices more than doubling over the last 12 months and an economic slowdown that has prevented them passing on much of the rise to passengers.

 

"The price per barrel is over USD$130 and this creates a dramatic situation for the sector," he said, but declined to say by how much the airline might increase fuel surcharges. "It's going to depend on the response of the market, on the strength of demand. It is a question that we still don't have an answer to."

 

Finance Director Enrique Dupuy said Iberia was looking to hedge its 2009-2011 fuel needs at between USD$110 and USD$120 a barrel. The airline currently has 48 percent of its 2008 fuel needs hedged at around USD$83 per barrel, he said.

 

Merger discussions between shareholders of Spanish low cost airlines Vueling and Clickair -- 20 percent owned by Iberia -- were "very advanced", Conte said.

 

"Talks between the shareholders in the two companies are going well," he said, though the parties had to draft a memorandum of understanding to jump various regulatory hurdles.

 

"I believe we are very close at this point."

 

In contrast, Conte said Iberia had "absolutely no interest" in the privatization of Italy's Alitalia.

 

(Reuters)

 

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http://www.theage.com.au/national/jobs-ser...80530-2k02.html

 

Jobs, services at risk, says Qantas

 

Ben Doherty, Mathew Murphy and Katharine Murphy

May 31, 2008

 

QANTAS — in dispute with its engineers over pay — has been urged back to the negotiating table by the Federal Government, but the national carrier is warning that more job losses, and possible cuts to international services, could come as early as next week.

 

Deputy Prime Minister Julia Gillard said yesterday that Qantas management and the engineers' union needed to resume talks after three stopwork meetings this week disrupted services across the country.

 

A four-hour meeting of Melbourne engineers yesterday resulted in the cancellation of eight flights.

 

The national secretary of the Australian Licensed Aircraft Engineers Association, Steve Purvinas, said the union wanted to resume talks but further stopwork meetings, and even two-day stoppages, remained possible bargaining tools in a dispute likely to last months.

 

The union wants a 5% pay increase for its members. Qantas has offered 3%.

 

Qantas chief executive Geoff Dixon has said he will not negotiate while industrial action is under way, telling the union "we're prepared to wait this one out". But Mr Purvinas said the union stood firm on its claim.

 

"Our members have been pretty patient, they've been waiting 2½ years. I don't think they're looking at an end to this round of discussions in the immediate future."

 

Ms Gillard said that passengers were suffering and the impasse needed to be settled. "The Government urges all parties to … resolve the matter as soon as possible," she said.

 

Qantas warned this week that planes would be grounded, services cut by 5%, and jobs possibly shed to counter its soaring fuel bill. In a memo to staff yesterday, Mr Dixon warned that even these measures would "not be enough". "The issues we face are real and substantial," he said.

 

He said a decision on possible cuts to international services was due next week. "We are very aware that withdrawing from any market has long-term consequences. We do not make decisions to cut routes, trim capacity and shed jobs lightly. We certainly do not make them on the basis of industrial relations," he said.

 

Broker JPMorgan warns that Qantas could post a $1 billion full-year loss if oil hits $US200 a barrel. It has fallen below $US127 a barrel in recent days, but concern remains that demand in Asia, or supply disruptions, could push the price above $US200 by year's end.

 

JPMorgan said Qantas would need to raise ticket prices by 20% if oil did hit $US200 a barrel.

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Keith, a nice new destination for you to explore :p

 

American Airlines Starts Moscow-Chicago Flight

 

June 2, 2008

American Airlines will launch its first flights between the United States and Russia on Tuesday, becoming the first airline to fly between Chicago and Moscow.

 

The flights will have Russian-speaking staff and will serve vodka for the Russian palate and red wine for the American, the airline said on Monday.

 

"We're sure that the Moscow-Chicago link will strengthen the economical ties between Russia and the United States," Craig Kreeger, American Airlines' senior vice president of international operations, said in a statement.

 

US airlines, suffering from record fuel prices, low-cost competition and a weakening domestic economy, are increasingly turning to more profitable international routes.

 

Kreeger said American Airlines would seek a Russian partner in future to fly incoming passengers from Chicago to other parts of Russia, which spans 11 time zones.

 

The first of two daily flights will leave Moscow's Domodedovo Airport on Tuesday, arriving 10 hours and 45 minutes later in Chicago's O'Hare airport, after a journey of 10,000 miles.

 

Later, another flight will go eastbound across the Atlantic to Moscow, taking around 10 hours.

 

American Airlines will fly every day to Moscow except Sunday, and every day to Chicago minus Monday.

 

The first phase of "open skies" -- allowing EU and US airlines to serve any route between the EU and the United States for the first time -- took affect from March 30 and replaced restrictive treaties dating back to World War Two.

 

(Reuters)

 

Who will be the Russian partner ? :huh:

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Been trying to work out how to get an 'invitation letter' required by the Russian embassy to obtain a visa. I suppose the hotel in Russia should be able to help? Failing which I guess I'd just book a phantom local tour.

 

DME-ORD does look like a nice long route I could use a DONEx on. :D

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i think MH should join any of the alliance ASAP.....to survive...

 

ONEWORLD: Record revenues raised for oneworld airlines through alliance fares and sales activity

 

Airlines in oneworld benefited from record revenues from the alliance's sales activities in 2007 - when the grouping completed its biggest expansion yet.

 

Eight million passengers transferred between the airlines' flights during the year - 6 per cent more than in 2006 - producing interline revenues within the alliance of US$2.2 billion, up 19 per cent year-on-year.

 

Revenues generated by oneworld fares and sales activity totaled more than US$725 million, a 10 per cent increase.

 

A key driver behind these rises was the alliance's biggest membership expansion since its launch in 1999, with Japan Airlines, Malév Hungarian Airlines and Royal Jordanian joining on 1 April 2007 as full members, with LAN Argentina and LAN Ecuador as affiliates, followed six months later by China's Dragonair.

 

So 2007's revenues include nine months of contributions from most of the new recruits, and three months from Dragonair. Even without this, the alliance's established members would have enjoyed healthy growth in their revenues from oneworld.

 

Alliance sales to the corporate sector were particularly strong in 2007, with revenues from businessflyer, the alliance's product for small and medium sized accounts in key target markets, up by a fifth on 2006. More than 7,000 corporate customers are now signed up in Belgium, France, Germany, the Netherlands, Switzerland, with the product extended last year to Italy too.

 

Yields from oneworld sales overall also remained solid, with more than two-thirds of revenues generated by the alliance's fares coming from tickets sold for travel in premium cabins.

 

The alliance also maintained its focus on supporting their efforts to reduce costs. Savings from its joint procurement activities now total more than US$300 million, with the bulk of 2007's benefits coming from initiatives in the Engineering and Maintenance arena.

 

These efforts helped oneworld maintain its position as the airline grouping with the best financial track record. Based on latest full year results from members of all three alliances, oneworld members averaged an operating margin of 6.4 per cent - against 5.8 for Star and 5.6 for SkyTeam.

 

Over the past three years, the combined net profits of oneworld member airlines have totalled US$8.8 billion, while SkyTeam members have lost US$6.9 billion between them and Star's partners have reported collective losses of US$10.1 billion.

 

oneworld also continued its award-winning ways, voted the World's Leading Airline Alliance for the fifth year running in the 2007 World Travel Awards, based on votes cast by some 170,000 travel professionals, including more than 110,000 travel agents in 200 countries.

 

Further details on the alliance's performance in 2007 are featured in its 2007 businessreport, available now from oneworld Project Directors at its member airlines or from any member of its central alliance team.

 

oneworld Managing Partner John McCulloch said: "In a business where operating margins are thin at best - let alone at a time of soaraway fuel prices - revenues and cost savings from oneworld make an increasingly important input to our member airlines' financial standings, and we are committed to increasing the contribution the alliance makes.

 

"Besides our record membership expansion, our record revenues in the past year also reflect the quality of service oneworld and its member airlines provide, our unparalleled international route network and our unmatched range of alliance fares and sales products."

 

 

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i think MH should join any of the alliance ASAP.....to survive...

[/quote/]

 

See Skyteam news about VN and MH... ;)

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BA Execs Face Price-Fixing Charges

 

July 26, 2008

Four past and present British Airways executives will be charged with fixing the price of passenger fuel surcharges on transatlantic flights, the Financial Times reported on Saturday.

 

In an unsourced report, the newspaper said the case was being brought by the Office of Fair Trading (OFT) against the four men, who face the threat of up to five years in jail.

 

British Airways' rival Virgin Atlantic blew the whistle on BA in 2006 after individuals at the two carriers discussed proposed changes to fuel surcharges, introduced to help airlines cope with rising cost of jet fuel.

 

Precise charges are due to be announced within weeks, the newspaper said.

 

British competition law makes tipping off a rival about price changes illegal and bans firms from agreeing prices.

 

Fuel surcharges rose from GBP5 pounds to GBP60 per ticket on typical BA or Virgin long haul flights between 2004 and 2006. British Airways has defended the rises, which came as crude oil prices surged.

 

In February British Airways and Virgin Atlantic agreed together to pay about USD$203 million to settle a lawsuit brought by passengers over the surcharge fixing.

 

Last year BA agreed to pay roughly USD$247 million in a settlement with British authorities.

 

(Reuters)

 

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LONDON (AFP) - - British Airways and Spanish national carrier Iberia said Tuesday they are holding talks on a multi-billion-dollar merger as the aviation sector battles soaring fuel prices.

 

"British Airways and Iberia are holding talks with a view to an all-share merger between the two companies. The negotiations are supported unanimously by the boards of both companies," the companies said in a statement.

 

Shares in BA and Iberia spiked in London and Madrid in reaction to the announcement.

 

The two groups have a combined stock market capitalisation of about 8.6 billion dollars (5.5 billion euros) according to AFP calculations using current share price values.

 

A tie-up would rival Air France-KLM, the world's biggest airline that was born in 2004 after the merger of France's national carrier and Dutch peer KLM.

 

The dramatic merger plan comes as the world's biggest airlines face commercial headwinds from record high oil prices, which ramp up jet fuel costs, and weak consumer spending that dampens demand for air travel.

 

"The aviation landscape is changing and airline consolidation is long overdue," BA chief executive Willie Walsh said in the release.

 

"The combined balance sheet, anticipated synergies and network fit between the airlines make a merger an attractive proposition, particularly in the current economic environment.

 

"We've had a successful relationship with Iberia for a decade and are confident that both companies' shareholders would benefit from the proposed tie-up," Walsh added.

 

BA, which holds 13.15 percent of Iberia, had abandoned takeover plans for the carrier in November last year after a Spanish bank built up a substantial blocking position.

 

Iberia, the market leader on flights between Europe and Latin America, also revealed Tuesday that it had bought a 2.99 percent holding in British Airways and has the option to buy another 6.99 percent.

 

"The airlines' shareholdings reinforce the mutual interest of both companies in each other," said the joint statement.

 

"It is expected that it will take several months to reach agreement on the terms of the merger and to finalise a joint business and integration plan for the combined group."

 

Under the tentative proposals, the British Airways and Iberia brands would both be retained.

 

Following the news, BA's share price rose 7.46 percent to 252 pence, while Iberia shares jumped 12.8 percent to 1.85 euros as trading resumed in Madrid after a temporary suspension.

 

"A merger would be good news for our customers and enhance our existing relationship," Iberia chairman and chief executive Fernando Conte said in the statement.

 

"We've worked together for nearly 10 years and a tie-up would build on that success." He added that it would also strengthen the Oneworld alliance -- a network of ten airlines working together to cut costs -- and strengthen Madrid's position as the European gateway to Latin America.

 

Oneworld also includes American Airlines, Cathay Pacific, Finnair, Japan Airlines, LAN, Malev, Qantas and Royal Jordanian.

 

Soaring fuel costs, coupled with the credit crunch, have caused the collapse of 25 carriers since the start of 2008. Only airlines owned by oil-producing Gulf states, such as Emirates, appear immune to the aviation downturn.

 

BA, which unveils first-quarter results on Friday, is pushing ahead with its OpenSkies transatlantic airline amid reports that it also plans to slash short-haul flights because soaring fuel costs.

 

OpenSkies, which was created to take advantage of more flexible rules on carriers across the Atlantic, said Monday it would launch a new daily service between Amsterdam and New York.

 

The carrier, a wholly-owned subsidiary of British Airways, was launched in June as a "premium" airline initially on the New York-Paris route.

 

OpenSkies claims to be the first airline created on the basis of the US-European Union open-skies pact that allows carriers increased access to each other's markets.

 

http://malaysia.news.yahoo.com/afp/2008072...pa-cac1e9b.html

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British Airways And Iberia In Merger Talks

 

July 29, 2008

British Airways and Spain's Iberia are in talks to create the world's third-biggest airline, which could form the basis of a three-way transatlantic tie-up and trigger a fresh wave of industry deals.

 

The UK carrier said on Tuesday the two would spend several months discussing terms of an all-share merger that would create an airline worth a combined USD$8.4 billion, flying to over 200 destinations and which would significantly expand BA's presence in the expanding Latin American market.

 

News of the deal shot Iberia shares 21 percent higher, while BA stock rose 6 percent.

 

BA Chief Executive Willie Walsh and Iberia Chairman Fernando Conte told a news conference in Madrid the new firm would operate as two separate brands but benefit from cost savings, greater buying power and higher revenue synergies thanks to a larger network.

 

"This creates a much stronger airline, capable of competing in a much changed environment in the airline industry," said Walsh.

 

The BA chief also confirmed the two carriers were still in talks with US carrier American Airlines about a transatlantic agreement.

 

"Over the medium term, they should reap significant rewards in terms of both synergies... and also in terms of maximising revenues," said NCB analyst Neil Glynn of the proposed deal.

 

"It also possibly brings a three-way transatlantic arrangement closer between BA, Iberia and American Airlines."

 

Both Walsh and Conte had previously stressed the need for more consolidation among European airlines, as they fight the twin threats of high fuel costs and falling consumer demand.

 

A deal would end British Airways' 16 month chase for Iberia.

 

Last March's approach by BA, in concert with private equity group TPG, ended in failure after Iberia's biggest shareholder Caja Madrid scuppered a deal. A source close to the matter said on Tuesday savings bank Caja Madrid now supported a tie-up.

 

BA's 8.4 percent shareholder Standard Life also backed the deal.

 

Air France and Dutch carrier KLM merged in 2004 to become the world's biggest carrier, while a string of airlines such as privately owned bmi are seen as future targets.

 

BA's Walsh said the move was not a life-saving tie-up, but made sense in current market conditions.

 

"I don't see this as a matter of survival, but as two strong companies coming together. We do not see this as the end game but as the start of a new era," he told reporters. "The combined balance sheet, anticipated synergies and network fit between the airlines make a merger an attractive proposition."

 

Walsh said the opportunity provided by the new Open Skies pact, which has freed up restrictions on carriers flying between the United States and European hubs, had prompted a deal.

 

"(This is a) consequence of liberalization of the aviation industry. Hand in hand with liberalization is the need for consolidation," he said.

 

The combined group would have revenue of EUR16.5 billion euros -- around 60 percent of that from BA -- nearly 450 aircraft, and would enable the two to better compete with larger rivals Air France-KLM and Lufthansa. The former had turnover of over EUR24 billion last year.

 

Walsh said the current proposal was "very different" from last year's EUR3.4 billion bid, which at 3.6 euros a share was more than double Iberia's share price shortly before Tuesday's announcement.

 

"A year in this industry is a long time," said Walsh. "This is a much more exciting development than the previous discussions."

 

BA has been a shareholder of Iberia since its privatization nearly 10 years ago and owns 13.15 percent of the Spanish carrier. Iberia has a 2.99 percent direct stake in BA on top of exposure to 6.99 percent via contracts for difference linked to BA's share price, which closed at 248.5 pence on Tuesday.

 

BA said both parties were confident of securing regulatory approval, adding that the European Union had already allowed the duo to cooperate widely and that regulators in Spain and France had reacted positively to news of a possible merger.

 

However, a spokesman for BA rival Virgin Atlantic was critical. "This potential merger will only fuel BA's dominance at Heathrow... We all know that dominant players offer less choice and push up ticket prices," he said.

 

BA and Iberia would control nearly 45 percent of take-off and landing slots at Heathrow, the core hub for flights between Europe and the United States.

 

(Reuters)

 

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Keith, you ain't flying to JFK, are you ? :huh:

 

Baggage Glitch Delays American Flights At JFK

 

July 30, 2008

American Airlines said on Wednesday about 35 flights had been delayed from New York's John F Kennedy Airport after the software that controls the baggage sorting conveyor belt malfunctioned.

 

Workers were sorting bags by hand, but many items were not being put on flights before departure, American said in a statement. Delays ranged from an hour to an hour and a half.

 

"So, we are announcing the issue to passengers and allowing them to choose whether they go on the flight or not," American said. "Once we have the issue resolved, we'll get the bags that are left behind on their way to the customer's destination and delivered to them."

 

The Port Authority of New York and New Jersey, which runs the region's airports, declined comment, saying baggage handling is the responsibility of the airlines.

 

American said it would waive the fees it charges to check a first and second bag on Wednesday. Earlier this year, American and its rivals implemented the controversial fees on domestic flights to offset the rising price of jet fuel.

 

American noted, however, that most of the delayed flights are international, so the fees do not apply in most cases.

 

US airlines are under increasing pressure to limit delays and cancellations as they fly fuller aircraft to lower costs.

 

More than a quarter of flights operated by major US airlines and their affiliates were delayed last year, with on-time performance suffering most at New York-area airports. The New York region handles about a third of all domestic air traffic.

 

(Reuters)

 

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Nothing planned at JFK but upcoming flights include AA at HNL, LAX and LHR. The LHR one is a transit to a BA flight at T5... be very afraid.

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Nothing planned at JFK but upcoming flights include AA at HNL, LAX and LHR. The LHR one is a transit to a BA flight at T5... be very afraid.

 

BA seems to have fixed their baggage-snags and is moving more and more flights to T5 now; I've to say, honestly, it IS a very nice Terminal from the passenger's point of view !!! (didn't use any Lounge, though :sorry: )

 

Please, let us know in due time, what you think of it :pardon:

 

Meanwhile, some other (bad) BA news:

 

British Airways Posts 88 Percent Profit Fall

 

August 1, 2008

British Airways' profit collapsed in the first quarter as high oil prices, an economic slowdown and weak consumer confidence combined in what the airline called the worst trading conditions ever.

 

Profit before tax for the three months to end-June dropped 88 percent to GBP37 million pounds (USD$73.38 million) from GBP298 million last year.

 

BA Chief Executive Willie Walsh also confirmed talks with Spanish carrier Iberia about a potential all-share merger were underway but said it was "too early to say what impact it will have on the business in terms of jobs".

 

The British carrier cut its annual revenue growth target to 3 percent from 4 percent and said it was focused on "achieving a small profit in the current financial year" and sustainable profitability in the medium and long-term.

 

"This is the worst trading environment the industry has ever faced and fares are likely to go up as we reduce some winter capacity and cope with unprecedented oil prices but we won't be grounding any aircraft," Walsh said.

 

Despite branding BA's numbers as "awful" Blue Oar Securities transport analyst Douglas McNeill said there were some positives.

 

"The good cash position, reduction in net debt and 7 percent increase in yields were bright spots," said McNeill.

 

BA now plans to raise ticket prices to recoup losses from a planned 3 percent reduction in winter capacity and spiraling oil prices.

 

It will also scrap short-haul services from Gatwick to Newquay, Dresden, Sarajevo and Poznan in Poland from October 26 and has put the launch of new services between Gatwick and Valencia and Oporto on hold.

 

It will cut flights on its Heathrow to New York JFK route to seven from eight daily, while routes to Tokyo, Hong Kong, Los Angeles and Washington will lose frequency too.

 

Unlike its low-cost rival Ryanair, which has decided to ground 20 aircraft over the winter to save cash, BA has ruled out grounding any of its 249-strong fleet -- opting instead to increase ticket prices.

 

Ryanair on Monday said it would use the economic slowdown to cut fares and take business from rivals as it posted an 85 percent slide in first-quarter net profit.

 

Although BA said it had "mitigated the impact" of rising bills, its fuel costs rose 49 percent to GBP706 million during the period as the price of a barrel of London Brent crude continues to hover around USD$123. BA said its annual fuel bill would likely top GBP3 billion.

 

It said it is now spending upwards of GBP8 million a day to keep its planes in the air.

 

The group's operating profit fell to GBP35 million from GBP255 million during the same period last year.

 

The results are the first full quarter to include operations at Heathrow's new BA-only Terminal Five.

 

BA said more than six million passengers had travelled through the terminal since it opened for business in late March and that it was going "from strength to strength".

 

Having revised its capital expenditure plans, BA has ordered six new Boeing 777-300ER aircraft for delivery in early 2010.

 

"They are 23 percent more fuel efficient than the Boeing 747-400 and give us additional flexibility in the long-haul fleet, said Walsh.

 

(Reuters)

 

 

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American Air To Speed Up Boeing 737 Deliveries

 

August 13, 2008

American Airlines plans to take delivery of another six Boeing 737-800s in 2010, further accelerating the replacement of the carriers's fleet of gas-guzzling MD-80s.

 

The new deliveries, announced by parent AMR on Wednesday, come three months after the airline said it would cut flights in order to save on fuel costs and retire at least 75 of its older planes, including about 40 of its 1980s-era MD-80s.

 

American has said it needs to fly fuel-efficient aircraft to help offset the high costs of jet fuel, which has plagued the airline industry and led to quarterly losses for the biggest carriers.

 

The new schedule means American will take 76 of Boeing' single-aisle 737-800s during 2009 and 2010, up from its previous plan to take 70 over that period.

 

The Fort Worth, Texas-based carrier, which is Boeing's largest customer, plans to take delivery of 36 737s in 2009 and 40 in 2010.

 

Boeing's 737-800, the workhorse for many domestic and regional airlines, seats about 160 to 190 passengers. With a more advanced structure and better engines, the plane is up to 30 percent more fuel efficient than the MD-80. MD-80s were originally made by McDonnell Douglas, which Boeing bought in 1997.

 

American said it arranged backstop financing for about two-thirds of the 737s to be delivered in 2009 and 2010, but has no financing in place for any other orders.

 

The airline said it would have to make payments over the next few years for purchase commitments for Boeing 737s and larger, widebody 777s. Under these arrangements, it would have to pay USD$400 million in the remainder of 2008, USD$1.1 billion in 2009, USD$785 million in 2010, USD$100 million in 2011, USD$218 million in 2012 and USD$1 billion for 2013 and beyond. :blink:

 

Shares of AMR were down 10 percent at USD$10.97 on the New York Stock Exchange, as oil prices rose again after recent dips.

 

(Reuters)

 

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Airlines To Apply For US, EU Immunity

 

August 14, 2008

American Airlines, British Airways and Iberia are set to announce on Thursday they are applying for antitrust immunity from competition authorities in the United States and Europe in order to form a trans-Atlantic joint venture, the Financial Times reported in its online edition.

 

If the application is approved, the alliance would share profits and revenues for trans-Atlantic routes, and cooperatively arrange capacity, networks, pricing and sales, the report said.

 

An alliance by the three airlines is seen attracting sharp opposition from rivals on the grounds that it would harm competition. American and BA have tried and failed to gain antitrust immunity twice in the past.

 

But the airlines are likely to tell US regulators the competitive landscape has been changed by the "open skies" agreement between the United States and the European Union.

 

The agreement, which came into force in March, allows carriers access to any US city from any point in the EU, and vice versa.

 

Spain's Iberia is in merger talks with BA, which first said in April it was talking to American Airlines about the alliance.

 

(Reuters)

 

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BA, American, Iberia Sign Transatlantic Deal

 

August 14, 2008

British Airways, American Airlines and Spain's Iberia said on Thursday they have agreed to a transatlantic tie-up designed to make the partners more competitive in an increasingly global air travel market.

 

The trio said it would file for antitrust immunity from the US Transportation Department later in the day and also planned to notify EU regulators.

 

American, BA and Iberia intend to cooperate commercially on flights between the United States, Mexico and Canada and the European Union, Norway and Switzerland.

 

BA chief executive Willie Walsh told reporters the agreement includes deals on revenue sharing, as well as pricing and schedule co-ordination. He said he is confident of approval.

 

"I firmly believe that the regulators will approve our application for antitrust immunity," he said, adding that the US/EU "Open Skies" agreement earlier in the year would help their bid.

 

"Open Skies" allows airlines to access any US city from any point in the European Union and vice versa, meaning previously restricted airlines can now access London's Heathrow Airport. BA and American had an application for antitrust immunity rejected in 2001 due to a shared dominance of the London airport.

 

"We are applying in a world very different from the world when we last applied in 2001," Walsh said, adding that immunity would allow the airline to compete more effectively with other transatlantic alliances already granted immunity.

 

Among these are the Star Alliance, which includes Lufthansa and United Airlines; and SkyTeam, which includes Air France-KLM and Delta Air Lines.

 

Alliances allow airlines to share routes and resources and cut back on capacity without going through a merger.

 

Gerard Arpey, chief executive of American, said in an interview that the alliance would not create a monopoly.

 

"This is as competitive a market as exists across the Atlantic," Arpey said.

 

The Oneworld alliance, which also includes BA, American and Iberia, will be part of the application.

 

Robert Mann, an airline consultant in the US, said a successful application is not a foregone conclusion.

 

"BA continues to hold the vast majority of Heathrow slots (over 40 percent) and while it indicates it is willing to relinquish some, these slots have been trading for as much as USD$60 million per pair," he said.

 

"So, relinquishing 100 slot pairs would be a USD$6 billion asset disposal, for which BA presumably wishes to receive fair value. The devil is in the details," he added.

 

Shares in BA, which is also in all-share merger talks with Iberia, initially rose but closed down 0.7 percent, valuing the company at just under GBP3 billion pounds (USD$5.62 billion).

 

AMR shares were up nearly 3 percent at USD$11.40 on the New York Stock Exchange, and Iberia closed little-changed.

 

Walsh denied the deal would mean increased fares for passengers, a claim made by Virgin Atlantic President Richard Branson.

 

He called the argument "a broken record," but did not deny that prices would rise. He said that scenario was likely to be driven by high oil prices.

 

"This strategic relationship strengthens competition by providing consumers with easier journeys to more destinations," he added.

 

Strategic alliances between major airlines are expected to become increasingly common after a wave of consolidation among US airlines failed to materialize this year. US carriers are grappling with high fuel costs that threaten to undo the progress the companies made through years of painful restructuring.

 

AMR's Arpey declined to say what the company had to gain in terms of cost savings and revenue improvements from an alliance with BA and Iberia.

 

"It's a significant development speaking from American's standpoint," he said. "We need to be able to compete globally on a level playing field."

 

(Reuters)

 

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BA Will Not Give Up Heathrow Slots

 

August 18, 2008

British Airways chief executive Willie Walsh has vowed the airline will not surrender runway slots at Heathrow in order to land its proposed alliance with American Airlines, the Sunday Times reported.

 

Walsh told the paper that BA would not give up any of the prized slots, which have changed hands for GBP20 million pounds (USD$37.45 million) a pair, just as competition regulators are tipped to demand that the two carriers forego up to 10 slot pairs a day.

 

"There should be no slot remedy, I don't see how it could be justified." he said.

 

Both airlines along with Spain's Iberia said on Thursday they had agreed to a transatlantic tie-up and would file for antitrust immunity from the US Transportation Department and notify EU regulators.

 

BA, which is also in all-share merger talks with Iberia, holds over 40 percent of Heathrow's slots.

 

(Reuters)

 

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Qantas H2 Profit Falls, Says Weathering Challenges

 

August 21, 2008

Australia's Qantas Airways on Thursday reported a 2.5 percent fall in second-half profit on high fuel prices, but predicted it would meet forecasts for the current year.

 

Like other airlines worldwide, Qantas hit tough times in the second half of the year ended June 30, as soaring oil prices and softer demand for travel in some key markets took their toll. But it said it was better placed than almost any other airline to meet the challenges facing the industry.

 

On Tuesday, Qantas's main domestic rival, Virgin Blue, reported a 55 percent fall in 2008 profit on high fuel prices, cut its dividend and painted a gloomy outlook, sending its shares tumbling.

 

"This is a tough industry and this is by any stretch of the imagination a pretty good result," chief executive Geoff Dixon told a results briefing.

 

"Very few countries in the world have what Australia has at the moment, which is effectively viable airlines across the board, including obviously Virgin."

 

Airlines around the world have been cutting capacity, scrapping growth plans to battle high fuel costs, with the International Air Transport Association forecasting a loss for the industry worldwide.

 

The crude oil price has fallen 20 percent since peaking near USD$150 a barrel in mid-July, but it has not muted the cries of the airline industry, with Virgin Blue warning that it expected the year ahead to be its most challenging yet.

 

And on Wednesday, the International Air Transport Association's boss told a Sydney luncheon that "at least 25 airlines have gone bust" in recent months and that the industry was still on course to lose up to USD$6.1 billion this year.

 

Qantas made a net profit of AUD$351.4 million for January-June, down from AUD$360.4 million a year earlier.

 

"Assuming no further deterioration in economic conditions, Qantas expects its 2008/09 profit before tax to be broadly in line with analyst consensus forecasts," it said in a statement.

 

Analysts are expecting a pre-tax profit of AUD$743 million in the year ahead, about half the AUD$1.4 billion reported for 2007/08.

 

Qantas warned that its fuel expenses would be more than AUD$1.6 billion higher in 2008/09 but said it had hedged 81 percent of its crude-oil exposure at a worst-case all-in cost of USD$118 per barrel. Crude currently fetches around USD$116 a barrel.

 

Qantas also raised its dividend, declaring a final payment of 17 cents a share for a full-year payout of 35 cents, up from 30 cents in 2006/07.

 

(Reuters)

 

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EU Starts Probe Into BA, American, Iberia Tie-Up

 

August 29, 2008

European Union anti-trust authorities said on Friday they had launched an investigation into a planned tie-up between British Airways, American Airlines and Spanish carrier Iberia.

 

"We have opened, on our own initiative, an investigation under the treaty's anti-trust rules," European Commission spokesman Jonathan Todd said, when asked about Spanish media reports of a probe.

 

The trio said earlier this month they had agreed to a transatlantic tie-up, taking advantage of the US/EU Open Skies agreement earlier in the year. Alliances allow airlines to share routes and resources and cut back on capacity without going through a merger.

 

Todd said the probe was not a routine move under merger regulations, but was at a very preliminary stage.

 

American, BA and Iberia intend to cooperate commercially on flights between the United States, Mexico and Canada; and the European Union, Norway and Switzerland.

 

"Open Skies" allows airlines to access any US city from any point in the European Union and vice versa, meaning previously restricted airlines can now access London's Heathrow Airport.

 

BA and American had an application for antitrust immunity rejected in 2001 due to a shared dominance of the London airport, but they are hoping anti-trust authorities will now take a different view due to changes in their markets.

 

Immunity would allow the airline to compete more effectively with other transatlantic alliances already granted immunity.

 

Among these are the Star Alliance, which includes Germany's Lufthansa and US-based United Airlines; and SkyTeam, which includes Air France-KLM and US-based Delta Air Lines.

 

(Reuters)

 

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American Air Flight Makes Emergency Landing

 

September 2, 2008

An American Airlines passenger jet forced back to Los Angeles International Airport by a blown tire landed safely about two hours later on Tuesday after flying over the Pacific Ocean to burn off excess fuel.

 

American Airlines Flight 1586, a Boeing 737 bound for Toronto with 135 people aboard, blew a left rear tire on its main landing gear, apparently on takeoff from LAX, at about 11 am local time, a Federal Aviation Administration spokesman said.

 

Live local television coverage showed the plane touching down on an LAX runway and coming to a safe stop shortly before 1 pm local time.

 

FAA spokesman said it was not immediately clear when the plane's crew first learned that the tire had blown, but the damage was confirmed during a low pass over the airport's control tower shortly after takeoff.

 

American Airlines said the aircraft was carrying 130 passengers and five crew members.

 

LAX is the world's fifth busiest passenger airport, and the third most heavily used in the United States. It handled nearly 62 million passengers in 2007.

 

(Reuters)

 

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British Airways August Traffic Falls 1.6 Percent

 

September 4, 2008

British Airways said on Wednesday its traffic fell by 1.6 percent in August, led by a slump in economy passengers.

 

The airline, which says current trading conditions are the worst ever, said the volume of business class flyers edged up on last year but those who fill the cheaper seats shied away following recent ticket price increases and teething problems at Heathrow's Terminal 5.

 

"Market conditions for the industry remain very difficult, with the strong dollar largely offsetting the benefit of the recent fall in oil prices," it said in a statement.

 

"The outlook for premium bookings is uncertain as forward booking patterns for business travel develop after the summer break."

 

BA has recently added surcharges to tickets to cover the rising cost of fuel. It has also announced plans to merge with Spanish rival Iberia, a deal that has spawned a three-way transatlantic alliance with American Airlines.

 

The British airline said its load factor dropped over 2.7 percentage points to 77.3 percent during the month.

 

(Reuters)

 

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