Career Pilot

Industry News

Industry news is more important to career development and the job search than many aspiring career pilots realize. What new regulations that could affect your career lurk just over the horizon? A proposal is pending, for example, that could eliminate the longstanding FAA regulation that required airline pilots to leave the cockpit when they turn 60.

Which airline is thinking about buying another carrier? That could affect you directly if you work for the acquired carrier. Who is ordering new airplanes? If new aircraft are an addition to the carrier’s existing fleet, it will have to hire more pilots to fly them. How is the industry—and individual airlines—doing financially? While a company’s financial situation can change over time, you should know how an airline stands when you apply.

“Sully” Sullenberger, Flight 1549 captain, retires

Capt. Chesley “Sully” Sullenberger, who piloted US Airways Flight 1549 during its emergency water landing on the Hudson River in January 2009, retired from the airline March 3. Flight Attendant Doreen Welsh, who helped guide the flight’s 150 passengers to safety, retired on the same day. Sullenberger, 59, joined US Airways predecessor PSA Airlines in 1980. In addition to his flying duties, he became a member of US Airways’ flight operations safety management team in September 2009. On his final trip for the carrier, he captained Flight 1167 from Fort Lauderdale to his base at Charlotte Douglas International Airport in North Carolina. He flew the Airbus A321 with First Officer Jeff Skiles, his co-pilot during the Hudson landing, arriving 17 minutes ahead of schedule. Sullenberger has said that he will spend more time with his family in retirement, and plans to write another book. He also plans to continue talking with lawmakers about issues related to pilot safety, including minimum qualifications for pilots and the maximum number of hours pilots are allowed to work in a single day.

[ POSTED MARCH 9, 2010 ]

Allegiant Air buying 757s for new Hawaii service

Allegiant Travel Company announced March 5 that it has signed an agreement to acquire six Boeing 757-200 aircraft for use in new service to Hawaii. Its airline subsidiary, Allegiant Air, LLC, plans to place the first two 757s in service in the fourth quarter of 2010; two more are scheduled to enter service in the first half of 2011, and the final two in the first half of 2012. The six 757 aircraft have been in service with a single European operator since original delivery from Boeing, and are equipped for extended-range twin-engine operations (ETOPS), a requirement for long overwater flights. Allegiant Air expects to launch the service to Hawaii, which it cannot serve with its existing MD-80 fleet, once appropriate regulatory requirements have been met. It currently operates 46 MD-80 aircraft and expects to have 52 MD-80s and two 757s in service by the end of 2010.

[ POSTED MARCH 9, 2010 ]

C-5M Super Galaxy sets world records

A Lockheed Martin C-5M Super Galaxy was honored by the National Aeronautic Association on March 4 for setting a new record for greatest payload. A C-5M took off Sept. 13, 2009, carrying 176,450 pounds on a flight that set 41 world records. While that cargo exceeded the weight capability of any other Air Force airlifter, it represented only 62 percent of the C-5M’s maximum payload capability. The C-5M is a modernized version of the earlier A, B, and C models of the C-5, with unique capabilities and increased reliability. The previous payload record of 161,023 pounds was set in 1993.

[ POSTED MARCH 9, 2010 ]

Southwest pilots oppose CVR proposal

The Southwest Airlines Pilots Association on Feb. 24 joined pilots from other airlines in opposing a proposal by Sen. Jim DeMint (R-S.C.) to allow the use of cockpit voice recorder (CVR) data for disciplinary and punitive action against pilots. The NTSB has recommended that carriers be able to “routinely download and analyze all available sources of safety information, as part of their flight operational quality assurance program.” However, the NTSB states specifically that the FAA should “provide appropriate protections to ensure the confidentiality of the de-identified aggregate data, and ensure that this information is used for safety-related and not punitive purposes.” The proposal is a perfect example of a good intention to improve safety that has the opposite effect, said Capt. Carl Kuwitzky, SWAPA president. Southwest pilots fear the NTSB recommendation would jeopardize voluntary reporting program integrity that has been successful in improving airline safety.

[ POSTED MARCH 3, 2010 ]

Delta pilots oppose DOT conditions on slot swap

Delta Air Lines pilots continue to oppose a recent Department of Transportation decision that places onerous and potentially deal-breaking conditions on its tentative approval of a proposal by Delta and US Airways to exchange takeoff and landing slots in New York and Washington, D.C. Delta would transfer 42 pairs of slots at Ronald Reagan Washington National Airport to US Airways, along with international route authority to Sao Paulo and Tokyo; in exchange, US Airways would transfer 125 pairs of slots at New York’s LaGuardia airport to Delta and leased another 15 pairs. DOT conditioned its approval on the divestiture of 14 pairs of slots at Reagan National (33 percent of the total) and 20 pairs of slots at LaGuardia (16 percent of the total). Those and other conditions “substantially weaken the value of the deal and will likely render it unacceptable to both airlines,” said Capt. Lee Moak, chairman of Delta’s ALPA branch. “DOT’s claims that its actions are designed to protect the consumer are unsupported by critical analysis. The DOT’s decision is not only anti-consumer; it is also anti-labor and anti-business.”

[ POSTED MARCH 3, 2010 ]

United finalizes Dreamliner order

Boeing and United Airlines on Feb. 25 finalized an order for 25 787-8 jetliners. The agreement includes options to purchase another 50 Dreamliners. The order is valued at $4.2 billion at average list prices. United, the launch customer for the Boeing 777, expects to take delivery of the 787s at the same time it begins to retire the Boeing 747s and 767s it is operating on international routes. Boeing announced Feb. 24 that the third 787 has joined the Dreamliner flight-test program. ZA004, the fourth flight-test airplane to be built, took off at 11:43 a.m. local time from Paine Field in Everett, Wash. The program plan called for ZA004 to fly before ZA003 because the data ZA004 is collecting is needed more quickly, both for certification and development of the 787-9. Including United, 57 customers around the world have ordered 876 Dreamliners.

[ POSTED MARCH 3, 2010 ]

ExpressJet increases United Express flying

ExpressJet Holdings, Inc., parent company of regional and charter airline operator ExpressJet Airlines, Inc., announced that it is adding an additional 10 Embraer ERJ-145 regional jets to its agreement with United Airlines to provide service under the United Express brand. ExpressJet said Feb. 17 that it signed the agreement covering 22 ERJ-145 aircraft for United Express service effective December 1, 2009; they replace flying done by other United Express partner carriers whose contracts have expired. The base agreement has an initial term of three years for 11 aircraft and two years for the remaining 11 aircraft, and can be renewed by United up to a total term of five years. In February ExpressJet was operating 16 of the 22 aircraft contracted to United Express. The additional 10 aircraft, added through an amendment to the agreement, will begin operating for United Express on May 1. ExpressJet expects that full-year block hours within its contract flying segment should increase between 10 percent and 15 percent as a result of its flying for United.

[ POSTED FEBRUARY 23, 2010 ]

Cincinnati airport posts strong local growth

Local passengers at Cincinnati/Northern Kentucky International Airport (CVG) increased almost 21 percent in the third quarter of 2009, compared to the same period in 2008—giving the airport the largest increase in local passenger traffic. Another indicator that the local market has a high demand for air service is load factor (the percentage of seats that are occupied when a flight departs). CVG’s load factors ranged between 73 percent and more than 96 percent during the summer and fall of 2009. “CVG has seen explosive growth in its local passenger base over the last year, helping to fill parking lots and improve related revenue streams,” said John C. Mok, the airport’s CEO. Significant airfare reductions by the carriers serving the airport are one of the primary reasons for the growth in local passengers; for the past two reporting periods, CVG experienced a 38-percent decrease in airfares, the largest decrease among U.S. airports.

[ POSTED FEBRUARY 23, 2010 ]

American, Eagle add routes

American Airlines announced Feb. 18 that it will expand its international presence in New York with three new routes between John F. Kennedy International Airport (JFK) and San Jose, Costa Rica; Madrid, Spain; and Manchester, England. The new flights to San Jose will begin on April 6, while service to Madrid will start on May 1, and flights to Manchester will begin on May 13. American Eagle Airlines, the regional affiliate of American Airlines, said Feb. 22 that it will begin nonstop jet service between Los Angeles International Airport and Reno-Tahoe International Airport beginning June 10. Eagle will operate three daily flights each way, using 44-seat Embraer ERJ-140 jets.

[ POSTED FEBRUARY 23, 2010 ]

Southern Air adds two 777 Freighters

Southern Air Holdings, Inc. announced on Feb. 22 the addition of two Boeing 777 Freighters to its fleet. The first 777 was delivered earlier this month and the second will be delivered March 2. “The addition of these two Boeing 777s—the first to join our fleet—is a defining moment in the history of Southern Air that begins the next phase of the company's growth,” said CEO Daniel J. McHugh. Thai Airways International (THAI), one of Asia's fastest-growing cargo carriers, has entered into a block space agreement with Southern Air to utilize the full capacity of the two 777s. THAI Cargo and Southern Air will officially announce the freighter operation in March.

[ POSTED FEBRUARY 23, 2010 ]

American resuming service to Haiti

American Airlines will resume service to Port-au-Prince, Haiti, beginning Friday, the carrier announced Feb. 19. The first flight will depart from American’s hub at Miami International Airport at 6:40 a.m. EST, arriving at Port-au-Prince at 8:35. It will mark the first commercial passenger aircraft into Haiti since the earthquake that devastated the country on Jan. 12, American said. The carrier will offer two daily nonstop flights from Miami International Airport, one daily nonstop from Fort Lauderdale/Hollywood International Airport, and four flights per week from New York’s John F. Kennedy International Airport; the routes will use Boeing 737 and 767 aircraft. Beginning March 12, American Eagle will offer service into Haiti from its San Juan, Puerto Rico, hub. American has served Haiti since 1971 and employs more than 100 people in Port-au-Prince. Since the day after the earthquake, American Airlines and American Eagle have flown 30 relief missions into Haiti.

[ POSTED FEBRUARY 16, 2010 ]

AirTran launches service to Lexington, Tunica

AirTran Airways, a subsidiary of AirTran Holdings, Inc., launched nonstop service from Blue Grass Airport in Lexington, Ky., to both Orlando and Fort Lauderdale-Hollywood international airports on Feb. 11. To celebrate the inaugural flight, the airline hosted an event at the airport featuring famous Kentucky resident and Hall of Fame jockey Pat Day. AirTran also announced plans to begin service to Tunica, Miss., effective May 6. AirTran said its flights—to and from Hartsfield-Jackson Atlanta International Airport aboard Boeing 717 aircraft—will be the first scheduled air service by a major airline to the entertainment and gaming destination.

[ POSTED FEBRUARY 16, 2010 ]

Continental fleet service workers join Teamsters

Nearly 8,000 Continental Airlines fleet service workers at airports across the country voted by an overwhelming margin to join the Teamsters, Teamsters General President Jim Hoffa said Feb. 12. The National Mediation Board announced the election results Friday. “The excitement among my coworkers is very high because we know that we will have a strong contract that will give us job security and bring fairness to our jobs,” said Jose Ramirez, a Continental employee in Houston. Fleet service workers handle baggage and cargo, and perform other essential jobs, including marshalling jets to terminal gates. Some 3,600 Continental mechanics have been represented by the Teamsters for 12 years.

[ POSTED FEBRUARY 16, 2010 ]

American, JAL seek antitrust immunity

American Airlines and Japan Airlines (JAL) filed an application with the U.S. Department of Transportation on Feb. 12 for antitrust immunity that would allow them to forge a closer relationship and implement a joint business agreement governing their flight operations between North America and Asia. The airlines also will notify the Ministry of Land, Infrastructure, Transport, and Tourism in Japan of the transaction. “An immunized JBA will benefit the public, offer new competition in the fast-growing Asian aviation marketplace, and strengthen the relationship between American and Japan Airlines, which will support JAL’s successful restructuring,” said Gerard Arpey, American’s chairman and CEO. Antitrust immunity is made possible by the Open Skies accord reached by the United States and Japan in December 2009. When that agreement becomes effective, it will eliminate restraints on competition.

[ POSTED FEBRUARY 16, 2010 ]

Republic to shutter Lynx Aviation

New Frontier Airlines owner Repulic Airways said this week it will shut down Frontier’s regional carrier Lynx Aviation. Lynx was founded in 2006 to serve 14 of Frontier’s destinations with 11 Bombardier Q400 turboprop aircraft. With the closure, Fargo, N.D., and Tulsa, Okla., will lose service entirely, while the rest of the destinations will see their reduced service changed to regional jets. According to a representative from Republic, they couldn’t find a way to make the small regional airline profitable. The final changes will take effect by September.

[ POSTED FEBRUARY 9, 2010 ]

First Boeing 747-8 Freighter takes flight

The first Boeing 747-8 Freighter successfully flew Feb. 8. With 747 Chief Pilot Mark Feuerstein and Capt. Tom Imrich on the flight deck, the jet took off from Paine Field in Everett, Washington, at 12:39 p.m. local time and landed at 4:18 p.m. The airplane followed a route over western Washington, where it underwent tests for basic handling qualities and engine performance; it reached a cruising altitude of 17,000 feet and a speed of 230 knots. The new, high-capacity freighter is 18 feet, 4 inches longer than the 747-400 Freighter, providing customers with 16 percent more revenue cargo volume than its predecessor—which means an additional four main-deck pallets and three lower-hold pallets.

[ POSTED FEBRUARY 9, 2010 ]

Allegiant Air to open Grand Rapids base

Allegiant Air, LLC, a subsidiary of Allegiant Travel Company, announced Feb. 2 that it will establish a new base at Gerald R. Ford International Airport in Grand Rapids, Mich., and will start low-cost, nonstop service to Myrtle Beach, S.C. Beginning April 27, the carrier will base two 150-seat MD-80 series jet aircraft at the airport. The company said its operation will grow to 34 flights per week. Allegiant’s nonstop service from Grand Rapids to Myrtle Beach will begin April 30.

[ POSTED FEBRUARY 9, 2010 ]

Contract crew completes historic F-35 refueling

A contract aircrew from Wyle became the first to refuel the F-35B short takeoff/vertical landing variant (STOVL) of the Joint Strike Fighter (JSF) in flight using a probe-and-drogue refueling system. Wyle provides high-tech aerospace engineering and other services to the federal government on long-term outsourcing contracts. These aerial refueling missions were performed by Wyle aircrew flying a Navy KC-130 tanker aircraft assigned to the U.S. Navy’s Air Test and Evaluation Squadron 20 at Naval Air Station Patuxent River, Md. The refueled aircraft, designated the F-35BF-2, is one of three variants of this fifth-generation strike fighter. Wyle says it has the largest independent flight test team in the world with more than 70 members, including 53 pilots, flying 20-plus types of aircraft from supersonic manned jets to helicopters to unmanned flight systems.

[ POSTED FEBRUARY 9, 2010 ]

First 787 Dreamliner interior debuts on flight-test airplane

Boeing on Feb. 3 unveiled the first 787 Dreamliner with interior components. The third flight test airplane, ZA003, features a partial interior. Configured for flight-testing purposes, the interior also includes instrumentation racks, flight-test equipment, and workstations for engineers. “This airplane is specifically configured to test the passenger experience elements of the airplane,” said Tom Galantowicz, director of 787 Interiors, Commercial Airplanes. The interior includes 135 seats, multiple lavatories, and two crew rests. Certifying the interior components involves analyses and testing of the lighting, lavatories, stowage bins, dimmable windows, and galleys. Flight tests are continuing. The first 787 delivery, to launch customer ANA (All Nippon Airways) of Japan, is planned for the fourth quarter of this year.

[ POSTED FEBRUARY 9, 2010 ]

Aviation industry to take flight again, analyst says

The turmoil surrounding the aviation industry is finally expected to calm, consulting firm Frost & Sullivan said at the Singapore Airshow on Jan. 31. According to Cheong Chern Wai, the firm’s Asia Pacific research analyst of aerospace and defense, passenger traffic statistics show a significant decline across the globe, with 2 percent growth in 2008 against a high of 8 percent growth in 2007. “The first half of 2009 saw traffic declined even further, bringing a negative growth to the industry. As the economy began its slow ascent to recovery, passenger traffic also followed the same path to recovery, with the fourth quarter showing much improved growth.” The first regions to show positive signs of recovery were the Middle East, Latin America, and Asia Pacific, he said. Moving into 2010, airlines will continue to tread carefully, looking at profitable routes and reorganizing their network to drive growth in their business. “The important role of low-cost carriers has contributed to the growth of passenger traffic, especially in Asia Pacific, and is expected to be the pillar in pushing the aviation industry forward,” says Cheong.

[ POSTED FEBRUARY 2, 2010 ]

Flight Options pilots to vote on contract

The Teamsters Airline Division said Feb. 1 that it has reached a tentative agreement for a first pilot contract with Flight Options, LLC, the Cleveland-based provider of luxury business jet fractional ownership and charter programs. More than 500 Flight Options pilots, represented by Teamsters Local 1108 in Gahanna, Ohio, will vote on the proposed contract in March. The tentative agreement includes across-the-board pay increases for every pilot, longevity-based salary increases, scope and job security protections, additional paid time off, overtime provisions, an expanded crew basing system, and health insurance security, the union said.

[ POSTED FEBRUARY 2, 2010 ]

Horizon Air pilots ask for mediation

The union representing Horizon Air pilots petitioned the National Mediation Board on Jan. 28 to help conclude contract negotiations with Horizon Air and the carrier’s parent company, Alaska Air Group. “Four years of negotiations is more than enough time to reach an agreement that provides just compensation and fair work rules,” said Capt. David Bourne, Teamsters Airline Division director. “While the Alaska Air Group enjoys record profits, it has adamantly refused to share even a modest portion of those profits” with its pilots, Bourne said. “Instead, the carrier seeks concessions from its pilots, which devalues the flight deck experience and talent that allows the company to make its profits.”

[ POSTED FEBRUARY 2, 2010 ]

Continental, AirTran add routes

Continental Airlines announced Jan. 29 that it will increase its schedule of flights between Newark Liberty International Airport and London/Heathrow during 2010. The airline will add a fourth daily round-trip flight to the route in March and a fifth in October; including twice-daily service from Houston, these will bring to seven the airline’s daily departures to Heathrow. Continental also announced nonstop service between Cleveland and Green Bay, Wis., and Norfolk, Va., beginning May 2; the Continental Express service will use 50-seat Embraer regional jets. AirTran Airways announced Jan. 28 that it will begin new nonstop service between Grand Rapids, Mich., and its hubs at Baltimore/Washington and Orlando international airports.

[ POSTED FEBRUARY 2, 2010 ]

Boeing provides first look at 787 stall tests

Test pilots have conducted the first stall tests of the 787 Dreamliner as part of the initial airworthiness program for the airplane, Boeing announced Jan. 29. The testing went “very well and there were no surprises,” said 787 Chief Pilot Mike Carriker. Highlights and an interview with Carriker are featured in a three-minute video on a new 787 flight test Web site. Additional stall tests will take place throughout the flight test period.

[ POSTED FEBRUARY 2, 2010 ]

Delta to update aircraft instead of buying new

Delta Air Lines announced Jan. 25 that it will invest $1 billion, or about $300 million per year, through mid-2013 to improve its customers’ experience. “Rather than invest in new aircraft, Delta will be spending its capital to improve the quality and consistency of the on-board product and efficiency of the aircraft we already own,” said Ed Bastian, Delta’s president. Delta said it would install winglets on more than 170 Boeing 767-300ER, 757-200, and 737-800 aircraft to extend aircraft range and improve fuel efficiency by as much as five percent. It will complete the modification of 269 pre-merger Northwest aircraft, enhancing cabin amenities; add First Class cabins to 66 CRJ-700 aircraft operated by Delta Connection carriers; install full flat-bed seats in BusinessElite class on 90 trans-oceanic aircraft; and add in-seat audio and video on demand throughout Economy Class on 16 Boeing 747-400 and 52 Boeing 767-300ER aircraft.

[ POSTED JANUARY 26, 2010 ]

Eagle to launch seasonal Myrtle Beach service

American Eagle Airlines will begin nonstop seasonal jet service between Myrtle Beach (S.C.) International Airport and Dallas/Fort Worth International Airport beginning April 6, the regional affiliate of American Airlines announced Jan. 25. Eagle will operate the service through Oct. 31, using 44-seat Embraer ERJ-140 jets. The seasonal service recognizes Myrtle Beach’s popularity as a recreational destination, noted Gary Foss, vice president of planning and marketing for the AMR Regional Network. American Eagle also announced that nonstop daily jet service between Dallas/Fort Worth and two destinations in South Dakota—Sioux Falls and Rapid City—would begin April 6. The year-round service will be operated with 50-seat Embraer ERJ-145 jets. American and American Eagle operate approximately 745 daily departures from Dallas/Fort Worth to nearly 160 destinations.

[ POSTED JANUARY 26, 2010 ]

Delta expands business-jet operations

Delta Air Lines announced Jan. 21 that its wholly owned subsidiary, Delta AirElite, has acquired Kinston, N.C.-based Segrave Aviation, a charter service specializing in wholesale charter aviation services, private aircraft management, aircraft maintenance and fixed base operations. The transaction will double the size of the Delta AirElite fleet, and improve Web-based booking and the travel experience for fleet membership card and charter customers, said Delta, the only U.S.-based carrier with commercial and private jet service. Delta AirElite, which operates a fleet of owned and managed aircraft, was established in 1984 and is based in Cincinnati.

[ POSTED JANUARY 26, 2010 ]

Aviation industry aiding Haitian relief efforts

Members of the UPS pilots’ union, the Independent Pilots Association, are volunteering to crew Haitian relief flights without pay. “This is not the first time our members have stepped up and volunteered their services to move aid to a disaster area,” said Capt. Robert Thrush, IPA president, explaining that in 2005, more than 500 crewmembers volunteered to crew relief flights in the aftermath of Hurricane Katrina. As of Jan. 18, Miami-based Amerijet International had operated nine flights to Haiti for various organizations and was planning to operate additional flights daily; Amerijet also is collecting rice, dried beans, and tents to assist with the relief efforts. Lynden Air Cargo has used its Lockheed L100-30 Hercules aircraft to fly rescue vehicles, portable kitchens, and other relief supplies to Port-au-Prince; National Airlines and other cargo operators also have delivered aid. Deutsche Post DHL sent a disaster response team to help manage airport logistics in cooperation with the United Nations. Several American Eagle flights have delivered supplies to the beleaguered nation, and many airlines are encouraging customers to donate frequent flier miles to support relief efforts.

[ POSTED JANUARY 19, 2010 ]

Boeing 787 Dreamliner completes initial airworthiness testing

Boeing announced Jan. 15 that it has completed initial airworthiness testing on the 787 Dreamliner. This clears flight testing of the airplane to expand, with more crew members taking part in flights and allowing more airplanes to join the flight test program, Boeing said. Since the first flight in mid-December, the program has completed 15 flights totaling nearly 60 flight hours, climbing as high as 30,000 feet and flying as fast as Mach 0.65. Initial stall tests and other dynamic maneuvers also have been conducted by the six pilots flying the Dreamliner to date.

[ POSTED JANUARY 19, 2010 ]

Continental fleet changes costly

Continental Airlines announced Jan. 18 that it expects to record special charges related to aircraft of $36 million during the fourth quarter of 2009, including a $23 million reduction in the value of certain 737-300 and 737-500 aircraft and spare parts. Continental announced in June 2008 that it would retire all of its less-efficient Boeing 737-300 aircraft and a significant portion of its Boeing 737-500 fleet by the end of 2009, but the value of those aircraft declined more than expected, primarily because additional 737s were grounded by other airlines. Continental has continued to take delivery of more efficient 737-900 aircraft, but overall its 737 fleet contained 33 fewer aircraft in December 2009 than it did in June 2008. The airline also lost $13 million on the sublease of eight Embraer EMB-145 aircraft.

[ POSTED JANUARY 19, 2010 ]

Despite tough economy, Boeing delivers 481 jets

Boeing said that it delivered 481 commercial airplanes during 2009, a number that was in line with the company’s expectations of 480 to 485 airplanes. The Next-Generation 737 comprised most of those aircraft, with 372 deliveries. Boeing also delivered 88 777s, 13 767s, and eight 747s. The company said that the global recession was an oppressive market reality in 2009, driving many carriers to reevaluate their near- and medium-term fleet requirements. Nevertheless, Boeing Commercial Airplanes reported a strong backlog of 3,375 airplane orders. In addition, first deliveries of both the 787 Dreamliner and 747-8 Freighter are scheduled for the fourth quarter of 2010.

[ POSTED JANUARY 12, 2010 ]

Virgin America clears regulatory hurdle

The U.S. Department of Transportation on Jan. 8 confirmed that Virgin America’s proposed new ownership structure complies with U.S. laws requiring that domestic airlines remain under the control of U.S. citizens; no more than 25 percent of voting stock can be held by foreign nationals. The proposed structure reflects a change among Virgin America’s U.S. investors and allows employees to participate in the airline’s financial future. U.S.-based VAI Partners, LLC will continue to hold 75 percent of the airline’s voting stock, although the U.S. investors comprising VAI Partners will change. Cyrus Aviation Investor, LLC will increase its stake in the partnership to 55.5 percent; VAI MBO Investors, LLC—comprised of five individuals—will own 27.8 percent; and 16.7 percent will be held for distribution to employees at an initial public offering of company shares. Virgin Group holds the remaining 25 percent of voting shares. The proposed transaction will provide Virgin America with an additional $68.4 million in capital.

[ POSTED JANUARY 12, 2010 ]

Improving consumer confidence driving passenger growth

Last year was one of the worst for the airline industry, with financials for most airlines throughout the world in the red, according to Frost and Sullivan. Only in the third quarter of 2009 were there visible beginnings of some passenger airlines returning to the profit zone—a period that saw some legacy carriers turning profits while low-cost carriers posted losses, the company said. Air cargo carriers have seen revenue reductions of as much as 20 to 25 percent. Profit figures quoted by some Chinese airlines for the third quarter resulted from government economic stimulus activity, said Soumyajyoti Basu, Frost and Sullivan’s Asia Pacific consultant for aerospace and defense. “This trend is set to continue going into 2010. However, airlines come late in the business cycle. Hence, as the world comes out of the recession, the airlines industry will follow with a lag of a few quarters. The downside risk of a double-dip U.S. recession affecting the airlines sector is less pronounced.” He said the airline industry’s outlook for 2010 is one of restrained optimism, with the strongest growth in the Asia Pacific region.

[ POSTED JANUARY 12, 2010 ]