Spring 2005

Southern star
South Africa's Air Traffic Management Services (ATNS) is beginning to feel the benefits of implementing a comprehensive growth strategy. Air Traffic Management spoke to chief executive, Johan van Vollenhoven

 

US Airways restructuring period extended again
A Virginia bankruptcy court has granted US Airways more time to complete its restructuring plan. The airline had its original deadline of January 10 temporarily extended while bankruptcy judge Stephen Mitchell considered a permanent extension ? the airline now has until March 31 to file its plan. US Airways said it will stick to its agreement with GE, its largest creditor, to file before mid-February, but asked for the extension ?out of an abundance of caution.? It hopes to leave Chapter 11 bankruptcy protection by June 30. Mitchell also approved a cost saving deal with ground crew and gave the airline, in Chapter 11 since September, permission to hedge fuel purchases. Fuel price rises in 2004 meant that US Airways paid $300 million more for fuel in January-September than in the same period in 2003; full-year figures are due soon.

 

Widening losses for United
UAL Corporation, the parent of the bankrupt carrier United Airlines, reported disappointing results again for 2004, with operating losses for the fourth quarter soaring to $493 million from $134 million in the same period of 2003. The airline blamed high fuel costs for the losses. Revenues for 2004 were up 9.8% at $16.3 billion, and operating costs rose 5.4% to $17.1 billion, leading to a net loss for the year of $1.64 billion. United finished the year with $1.3 billion unrestricted cash; yields were flat and load factors rose only slightly over 2004. The airline said it had made ?meaningful progress? towards its target of a further $2 billion in cost cuts, but insisted that terminating existing pension plans was still vital if it were to leave Chapter 11 bankruptcy protection. United has been in Chapter 11 for more than two years, entering in December 2002. It last reported a quarterly profit in 2000. Total US airline losses in 2004 already total $8.6 billion, with Delta alone losing $5.2 billion over the year ? this approaches the record set by the industry's worst year, 2002, when losses totalled over $10 billion.

 

Vasp grounded
The Brazilian government cancelled the last eight routes of Vasp, a domestic carrier, yesterday, as the airline's financial crisis deepened. A strike by pilots and cabin crew, protesting at earlier cutbacks, started yesterday morning, making the airline's situation worse: it had already announced it would not fly any route with less than a 50% load factor, reducing its services to one a day on some days. Vasp is heavily indebted to various suppliers, including airport operator Infraero ? its unpaid fees date back yeas and now total 760 million reals ($284 million). Vasp has lost much of its traffic to rivals such as the low-cost startup Gol, and a Morgan Stanley research note in November 2004 said: ?The consensus in Brazil is that Vasp is unlikely to survive into 2005.? Other creditors include aircraft lessors, Petrobras, the Sao Paulo state government and the Bank of Brazil.