Air France-KLM Cargo Operation Result Positive, Airlines Plans Increase Cargo Volume 3.4 percent
Sharply higher margins drive recovery into final three months of 2010
Air France-KLM’s cargo unit swung to an $81.6 million operating profit in the final three months of 2010 from a $39.5 million loss a year ago, extending a year-long recovery that has been driven by sharply higher margins.
Revenue jumped almost 28 percent to $1.1 billion in the carrier’s fiscal third quarter from $884 million in the year-earlier period.
Traffic rose 4.9 percent in the quarter from a year ago on a 3.8 percent increase in capacity, which boosted the load factor almost one percentage point to 70.4 percent.
Unit revenue per ton of cargo transported gained 27.7 percent in the quarter.
Cargo booked a profit of $106 million in the first nine months of the fiscal year against a $507 million loss a year earlier as revenue soared 35.4 percent to $3.25 billion from $2.4 billion.
Traffic grew only 3.4 percent in the first nine months while unit revenue was up 30.9 percent.
The strong cargo performance contrasted with setbacks at the passenger unit caused by strikes by French air traffic controllers in October and harsh weather in December that resulted in thousands of cancelled flights and pushed Europe’s largest carrier into an unexpected quarterly loss of $62.5 million compared with a loss of $401 million a year earlier.
As a result, Air France-KLM is now forecasting a “positive operating result” for the fiscal year ending March 31 below its previous target of an operating profit of at least $408 million.
The carrier said “security issues” in countries it flies to in Africa, including Niger, Mali and the Ivory Coast and more recently Egypt and Tunisia likely will impact revenue in the current quarter.
Air France-KLM increased cargo volume 3.4 percent year-on-year in January on a 3.3 percent increase in capacity. The increase was substantially smaller than the 17.5 percent growth in January at rival Lufthansa Cargo. Americas traffic rose 5 percent and Asia-Pacific shipments gained 8.4 percent.
“The numerous one-off events (volcano, weather disruptions, air traffic control stoppages and geopolitical events) which have affected the current year do not call into question the structural recovery achieved by the group in 2010,” the airline said. “Our ability to adapt the network to geopolitical constraints remains.”
Royal Jordanian to Cancel Seven Flights as Volcanic Ash Cloud
Royal Jordanian (RJ) was forced to cancel seven flights on Sunday as a volcanic ash cloud from Iceland continued to block European airports for the fourth day in a row.
RJ flights on Sunday to Geneva-Zurich, Paris, Milan, Vienna, Frankfurt, Kiev and London were cancelled, while a flight to Barcelona was rerouted to Madrid, according to the RJ website.
About 30 countries have now closed or restricted their airspace, with the cloud of fine mineral dust particles from Iceland now extending from the Arctic Circle in the north to the French Mediterranean coast in the south and from Spain into Russia, Agence France-Presse reported (see story on page 6).
On its website, www.rj.com, the airline also says passengers affected by the closure of European airports will be rebooked onto the next available RJ flight, and can have their tickets refunded if they decide not to travel.
RJ Media Director/Spokesman Basel Kilani told The Jordan Times that RJ constantly updates its website on developments regarding any flights based on information it receives from European airports, and called on travellers to check the website regularly.
Minister of Foreign Affairs Nasser Judeh said all embassies and missions abroad are following up on the situation of Jordanians whose flights to and from European countries were cancelled due to the cloud of volcanic ash.
In a circular issued Sunday, a copy of which was obtained by The Jordan Times, the minister instructed all embassies and missions abroad to inform the ministry of developments in this regard, the Jordan News Agency, Petra, reported.
Due to the cancellations in flights from Amman to European destinations over the past few days, many travellers have been stranded in Jordan. For some it was an opportunity to rest and relax, while for others it was a source of annoyance.
Charlotte, a Belgian university student who came to Jordan to conduct research, said she was supposed to go back home Monday around 2:00am before the flight was cancelled.
“It is not a big problem for me. I am a university student, so it is okay, but I do not know when I will go back yet,” she told The Jordan Times.
However, she added that the cancellation has been a source of stress for her boyfriend Rek, who came to Jordan on an unplanned visit last Tuesday.
“He wanted to surprise me with a short visit. But his visit now is longer because of the cancellation,” Charlotte said, adding that her boyfriend, who works in a lab, is “a little bit stressed”.
American Airlines, Delta Airlines No Longer in FAA Safety Program
The nation’s two largest airlines have dropped out of a federal safety program that was designed to encourage voluntary reporting of pilot errors before they resulted in crashes.
Delta Air Lines Inc. and American Airlines cited an inability to reach agreements with pilot groups in suspending their Aviation Safety Action Programs, or ASAPs, which allow pilots to admit mistakes without fear of being punished.
The acting chief of the Federal Aviation Administration said it was “disheartening” to see the programs end, which a leading safety expert blamed on lack of trust between labor and management.
American had taken part for 14 years, and its program was used as a model at other carriers in the U.S. and abroad.
The pilots’ union at American, the Allied Pilots Association, charged that American was using the program to discipline captains for inadvertent safety lapses, putting their jobs at risk. The union sought language to strengthen job protections for pilots who reported errors.
“We will not accept any process that labels our pilots as reckless, and discipline for inadvertent safety events must stop,” union official Kevin Cornwell said at the time.
Tim Wagner, a spokesman for AMR Corp.’s American Airlines, said Friday the company preferred not to change provisions of the program but that the union balked and refused to extend the agreement. He said a self-reporting system from NASA is still in place.
Wagner said ASAP doesn’t have the day-to-day safety impact of such things as inspections and maintenance, “but it allows us to look at situations that have happened and make changes. We would love to see it renewed.”
A similar dispute led Delta Air Lines Inc., the nation’s largest carrier, to end its ASAP program in 2006, and subsidiary Comair also recently dropped out. Pilots at Delta and Comair are represented by the Air Line Pilots Association.
William R. Voss, president of the Flight Safety Foundation in Alexandria, Va., said Friday that ASAP is vital to maintain the improvement in airline safety over the past several years.
“These programs catch little problems before they become big problems,” he said.
While the pilots’ reports are confidential, Voss, a former FAA official, said ASAP helped identify certain runway configurations that can be confusing, which was a factor cited in the 2006 crash of a Comair jet in Kentucky. The accident killed 49 people.
Voss said he didn’t want to blame the unions or the airlines for the demise of the programs, but attributed it to deteriorating labor-management relations in the industry.
Acting FAA chief Robert A. Sturgell said in a speech last month that voluntary disclosure programs such as ASAP are critical for improving safety.
“It is disheartening to see some of our carriers and pilot unions abandoning these programs at a time when we need them the most,” Sturgell said. “I encourage you to separate safety from the labor issues and put these programs back in place.”
American Airlines Cutting 921 Flight Attendant Jobs
American Airlines is cutting 921 flight attendant jobs as it deals with a continuing downturn in passenger traffic and revenue.
American, the nation’s second-largest airline, said the cuts would take effect Oct. 1 and reduce its flight attendant ranks by 6%.
Of the 921 flight attendants whose jobs are being eliminated, 449 are taking voluntary leave or are otherwise leaving voluntarily, the AMR Corp. unit said.
An additional 244 will be put on involuntary leave for two months, while 228 employees will be furloughed — laid off but with rehiring rights, the Fort Worth-based company said.
Nearly half of the flight attendants to be furloughed are based at LaGuardia Airport in New York.
British Airways Flight Service Not Recovered After Cabin Crew Strike
British Airways said Tuesday it is canceling fewer flights through an upcoming four-day cabin crew strike because more employees want to cross the picket line.
The airline is still recovering from a three-day strike that ended Monday, in which the Unite union — locked in a long-standing dispute with airline management over pay and working conditions — went ahead with a walkout after talks collapsed at the end of last week.
The airline said that during the cabin crew’s next strike from Saturday to March 30 its schedule at London’s Heathrow airport will include up to 55 percent of short-haul flights and 70 percent of long-haul flights.
That compares to 60 percent of long-haul flights and only 30 percent of short-haul flights over the previous walkout.
BA said it will run a full operation using its own aircraft at the smaller Gatwick airport, also in London, and all flights to and from London City airport will be unaffected.
“As a result of the numbers of crew wanting to work, we are increasing significantly our flying schedule,” Chief Executive Willie Walsh said in a statement.
Walsh said the airline had coped better than expected during the three-day walkout partly because many crew members ignored the strike call.
But the strike jeopardized BA’s reputation and finances, with BA saying it cost the company about 21 million pounds ($31.5 million).
The Unite union and BA both claimed victory over the first strike. BA reported that nearly 98 percent of staff reported for work at Gatwick and more than half showed up at Heathrow, allowing it to reinstate a number of canceled flights.
But Unite said that only 300 of its 2,200 cabin crew scheduled to work over the weekend turned up, and accused the airline of counting inbound crew to inflate the numbers of staff on duty.
The airline is on track for a record loss this year after reporting an operating loss of 86 million pounds for the first nine months, compared to a profit of 89 million pounds a year earlier.
