News for Friday, July 30, 2010

@...Canadian authorities canceled two Mexico City-bound flights from airline Mexicana de Aviacion on Thursday amid mounting concerns over the financial health of the company. The flights, set to depart from Montreal and Calgary, were canceled due to a request to Canadian authorities from an unnamed creditor seeking clarification on Mexicana's debt situation, the airline said in a release. "The airline considers that the measures taken by the lessor are legally unjustified and a direct consequence of erroneous information," Mexicana said, adding it was working with Canadian authorities to resolve the problem and minimize disruption to passengers. Representatives from pilot and flight attendants unions said earlier on Thursday that Mexicana, one of Mexico's two dominant airlines, was considering filing for creditor protection as one option to keep the company operating. Lizette Clavel, head of the flight attendants union, told reporters that Mexicana, controlled by privately held Grupo Mexicana, was also considering cost cuts via salary reductions or selling the airline to the workers. Pilots' union head Fernando Perfecto told Reuters that workers' representatives have been in touch with Mexicana's management for the past few days in an effort to find the best solution for both sides. Mexicana, a member of the Oneworld alliance, was not available for further comment. Unions' representatives could not detail the current debt situation of the company. Several major Mexican companies have faced tough debt problems since the global credit crisis and subsequent recession in Mexico. Mexicana failed to place a $250 million bond earlier this year after a government bank refused to back it up. Volatility from Europe's debt troubles also throttled demand in Latin American corporate debt markets. Mexico's air industry was battered by the country's deep economic recession in 2009 and the H1N1 flu outbreak that hit tourism hard. Mexico's publicly traded airport operators OMA (OMAB.MX: Quote), GAP (GAPB.MX: Quote) and Asur (ASURB.MX: Quote) all depend on AeroMexico and Mexicana for a significant part of their revenue. Mexicana said in May it hoped to return to profitability this year after two years of losses and forecast at the start of 2010 that it would carry 12 million passengers, up 8 percent from the previous year. Local hotel company Grupo Posadas (POSADASL.MX: Quote) has a 30 percent stake in Mexicana.

@...Denver International Airport (DEN) today unveiled the conceptual design of the South Terminal Redevelopment Program at the Westin Tabor Center in Denver. Speakers included Mayor John W. Hickenlooper, Denver Manager of Aviation Kim Day and Architect Santiago Calatrava. In conjunction with RTD’s FasTracks East Corridor, the South Terminal Redevelopment Program is expected to create more than 6,600 jobs and is scheduled for completion in 2016. The South Terminal Redevelopment Program includes the construction of a train station to connect the airport to downtown Denver, a signature rail bridge and a plaza. The program also includes a planned 500-room hotel and conference center connected to Jeppesen Terminal. DEN is one of the few major airports in the world without a passenger rail link to the downtown city core. The train station, plaza and hotel will form a highly integrated and dynamic complex located directly south of and adjacent to the existing Jeppesen Terminal. This program will complete the original plans for the airport, which included an on-site hotel and a train station for a link to downtown Denver. At present, the South Terminal Redevelopment Program Phase I, which includes the hotel, train station, signature bridge and plaza, is estimated to cost $650 million. This estimate is based on a conceptual design, and individual projects will be developed only after analysis shows their financial viability. Phase II of the redevelopment program includes a new parking structure and renovations to the Jeppesen Terminal Great Hall. If airport management decides to move forward with Phase II of the redevelopment program, it is estimated to cost an additional $250 million, for an overall estimated total of $900 million, which is less than the $950 million originally projected. The program will be primarily financed by General Airport Revenue Bonds (GARBs) which will be repaid from airport revenues. No taxpayer and no General Fund money from the City will be used for the program. The City is in the process of reviewing the various program components to further refine the figures and develop a financing plan. “Denver International Airport is one of the most envied facilities in the industry,” Denver Manager of Aviation Kim Day said Thursday. “With the addition of the rail connection to our city core and the terminal hotel, we will truly be competitive with major international airports worldwide. The design complements the existing iconic architecture and provides an enhanced passenger experience while improving the connectivity for passengers and employees alike.” The airport will approach each project in the South Terminal Redevelopment Program individually in an effort to control costs and maintain budgets. “We are committed to fiscal responsibility for this project,” Day added. “We will keep a close eye on costs and we will not move forward with any project that does not make good financial sense. In addition, no taxpayer or General Fund dollars will be used to complete any of the projects in the South Terminal Redevelopment Program.” Parsons Transportation Group’s Denver office was selected as program manager in July 2009 based on its expertise and proposed personnel, including Santiago Calatrava as the team’s signature architect. Calatrava is a world-renowned structural engineer and architect who has designed visually stunning and instantly recognizable structures such as the Sundial Bridge in Redding, Calif., the TGV Railway Station in Liège, Belgium, the new Sondica Airport terminal in Bilbao, Spain, and the Olympic Sports Complex in Athens, Greece. Calatrava developed the overall concept of the South Terminal Redevelopment Program, which encompasses the siting and relationships of all the elements (hotel, train station, plaza and signature bridge) as well as establishing the passenger flow. The hotel architect is Gensler, a global design and architecture firm with a local office in Denver. M.A. Mortenson, Co., also located in Denver, is the construction manager/general contractor (CMGC) and will collaborate in the design process with Gensler to ensure constructability and an on-time and on-budget project. The hotel, scheduled to be completed in late 2013, is expected to create approximately 1,000 construction jobs, 225 permanent hospitality jobs and will potentially provide the City with up to $2 million in annual tax revenue. Revenue generated by the hotel will be used to pay off bonds used for its construction costs. Additional non-airline revenue generated by hotel amenities and plaza retail locations will help to maintain a competitive cost structure for DEN’s airline partners. The signature rail bridge is expected to be finished by early 2013, the terminal station two years later, and RTD’s train is scheduled to be opened to passengers in 2016. RTD’s train will link passengers between downtown’s Denver Union Station and the airport. The 22.8-mile airport corridor is the first for RTD to use commuter rail technology, with larger and heavier cars than the existing light rail system. Over 5,400 jobs are expected to be created at peak construction in 2012. It is being financed through a public-private partnership between RTD and an international team led by Fluor and Macquarie, which will operate the system for RTD.

@...Shanghai Airlines Co Ltd said on Thursday it has agreed to terminate its Star Alliance membership by the end of October. The city-based carrier to merge with China Eastern Airlines Co Ltd - a SkyTeam Alliance member - in February this year. Shanghai Airlines said it will continue to offer all Star Alliance customer benefits and its passengers will enjoy their worldwide alliance benefits until October 31, 2010. These include, for example, the collection and redemption of miles, participation in various Star Alliance fare products, and the provision of extra benefits to Star Alliance Gold and Silver customers, Xia Benjia, a Shanghai Airlines official, told China Daily. "The termination of the membership is a formality after China Eastern and Shanghai Airlines combined to become a single carrier," said Luo Zhuping, board secretary of China Eastern. "China Eastern signed a memorandum of understanding to join the SkyTeam global airline alliance in June. Therefore, Shanghai Airlines has to quit its former alliance to follow China Eastern," Luo said. Members of the same airline alliance can share assets such as sales offices, maintenance and operational facilities, bringing cost reductions. A shift from Star Alliance to SkyTeam Alliance will not bring about many changes for Shanghai Airlines, as the three global alliances - Star Alliance, SkyTeam Alliance and Oneworld - have similar requirements for facilities in line with global standards, said Li Lei, an analyst from CITIC China Securities. Analysts said Shanghai Airlines' decision to quit Star Alliance is just part of the two Shanghai carriers' merger and ongoing restructuring. China Eastern and Shanghai Airlines have undergone major restructuring since the merger plan was announced last July. Shanghai Airlines permanently suspended its trading on January 25 after eight years on the Shanghai Stock Exchange, and settled its share price at 7.27 yuan. China Eastern said in a statement to the Shanghai Stock Exchange on Thursday that its parent company, China Eastern Air Holding Company, will purchase Shanghai Airlines' subsidiaries - an in-flight catering company, an international travel agency and a trading company - to further integrate the two carriers' minor businesses. The combination of the businesses will help the new China Eastern set a uniform standard for purchasing aircraft, food and equipment. "A larger and more uniform order will not only save costs, but also result in greater efficiency," said Xu Xiang, an industrial analyst with Northeast Securities. The two carriers' cargo businesses are also undergoing restructuring, according to Luo.

@...American Airlines has decided to cut the jobs of 920 flight attendants. The airline has said it will cut the jobs as a result of the ongoing downturn in traffic and lower revenue. The job cuts will take effect on October 1st, around the same time that the airline furloughs over 200 staff. The second largest airline in the US has said those furloughed will be laid off but will have rehiring rights. Another 244 air attendants will take leave for two months as the company adjusts to staffing requirements for the upcoming winter months.

@...American Eagle Airlines, the regional affiliate of American Airlines, today announced daily nonstop service between New York's John F. Kennedy International Airport (JFK) and three new destinations – Norfolk International Airport (ORF), Cincinnati/Northern Kentucky International Airport (CVG), and Indianapolis International Airport (IND), beginning Nov. 18. Eagle will operate the service with 50-seat Embraer ERJ-145 jets. "American is delighted to introduce this new service from New York to three key business markets," said Art Torno, Vice President – New York. "Whether for business or pleasure, customers from Norfolk, Cincinnati and Indianapolis will enjoy increased access to New York City on American Eagle, as well as connections to the 28 international destinations American flies to from JFK, including the Caribbean, South America, Europe and Japan." American provides a global route network, served in New York by its state-of-the- art terminal at JFK International Airport and further enhanced by its oneworld® Alliance membership. American and American Eagle are expanding their New York presence, and, by 2011, New York customers will have access to approximately 290 daily departures to more than 80 unique destinations, including the new options for travel gained through American's partnership with JetBlue Airways. Read more: http://www.sacbee.com/2010/07/29/2924031/american-eagle-airlines-announces.html#ixzz0v7xkNJO8

@...British Airways has announced plans to start a new double daily weekday service from the Docklands Airport with flights to Copenhagen in Denmark, providing a direct air link between the two capital cities. There will also be one flight a day from London City on Sundays and one flight from Copenhagen on Saturdays as the airline opens up its route network from London City Airport with the launch of its first route to Scandinavia. The new flights will start on September 12 and will be operated by British Airways wholly-owned subsidiary BA CityFlyer with their fleet of brand new Embraer 190 aircraft. Luke Hayhoe, BA CityFlyer commercial manager said: "This has been a year of firsts for us at London City Airport, with new leisure focused flights to the Balearic Islands launched earlier in the year and now our first ever venture into Scandinavia. "Once again we are responding to demand from our customers for both business and leisure travel to Denmark, and we are delighted to be launching another exciting new route using our new aircraft."

@...House Transportation and Infrastructure Chairman James Oberstar (D-Minn.) and aviation subcommittee Chairman Jerry Costello (D-Ill.) introduced a short-term FAA funding extension July 28 that also includes provisions for airline pilot training requirements. Once passed, the Airline Safety and FAA Extension Act of 2010 would continue the FAA’s aviation programs, taxes, and expenditure authority until Sept. 30. The House and Senate hope to have a long-term funding bill passed by then. AOPA Top Stories * Changes to airline training hours in short-term FAA bill * Cobalt unveils piston pusher * Roush transferred to Mayo Clinic after Oshkosh crash * Hundreds at EAA turn out to ‘Meet The Administrator’ * AOPA, NBAA announce Light Business Airplane Conference * TSA, DHS open dialogue with GA community on security The bill would require the airline transport pilot certificate in order to fly right seat on the airlines and additional training. It also addresses pilot fatigue, requiring the FAA to implement new pilot flight and duty time rules within a year after reviewing scientific research on fatigue. AOPA is representing general aviation on a first officer qualifications aviation rulemaking committee, which is slated to provide recommendations by the beginning of September. The association has cautioned that changes should not create a barrier to entry into aviation careers. The pilot training provisions added to the funding extension bill have been negotiated between the House and Senate. Congress has focused on airline pilot training since the Feb. 12, 2009, Colgan Air Flight 3407 crash in Buffalo, N.Y. “In keeping with our commitment to safety, we have decided to take these bipartisan pilot safety and training provisions and include them in the extension,” Oberstar said. “We can no longer delay enacting the strongest safety bill in decades as we work on a final agreement on the greater FAA bill.” Sen. Jim DeMint (R-S.C.), ranking member of the aviation subcommittee on the Senate Commerce Committee, applauded the move by the House, saying, “I urge Senate Democrat leadership to do the same.” Meanwhile, Costello reaffirmed that he is still committed to seeing a long-term FAA funding bill passed. “I want to be clear that this should in no way detract from our efforts to finish the FAA bill. I am committed to completing that process, which is now in its fourth year, as it is critical that we provide stability to the FAA and our national aviation system by passing a multi-year reauthorization,” Costello said. “Rest assured, I will keep fighting and push for passage of this comprehensive and important bill that will lead to a better aviation system for all Americans,” said Sen. John D. Rockefeller IV, chairman of the Senate Committee on Commerce, Science, and Transportation, in a statement about the short-term extension that would give them more time to finalize the long-term bill. The Senate is expected to act on the short-term extension in the coming days.

@..."Southwest reported record revenue and unit revenue in the second quarter and said the strong growth trends are continuing." That's from TheStreet.com, one of numerous outlets reporting today on Southwest's second-quarter earnings report. The quarter was a good one for the low-cost giant, which "posted a profit of $112 million, or 15 cents per share, for the second quarter of 2010, as [it] saw traffic levels rise and total operating revenue reach a quarterly record of $3.2 billion, " the Dallas Business Journal writes. The Fort Worth Star-Telegram says that "excluding one-time accounting charges, Southwest posted a net income of $216 million, or 29 cents per share, which beat Wall Street analysts' estimates of 27 cents per share." Forbes.com cites "rising travel demand and record traffic levels" for helping the airline to a "strong second quarter, which featured a 23% jump in profits." The Wall Street Journal adds "Southwest, the biggest carrier of passengers within the U.S., outperformed the industry during the recession as its discount model resonated with customers." The Las Vegas Sun writes Southwest CEO Gary Kelly "said in a release … that revenue trends could continue in the third quarter with record loads anticipated in July. He attributed the airline's revenue success to the company's policy of not charging for bags and excellent customer service offered by employees." Bloomberg News echoes that theme, saying Southwest cited "its policy of not charging for checked bags helped fill planes. … Southwest is the only major U.S. carrier that allows passengers to check two bags at no charge, a policy it says has helped woo travelers from rivals. The company's planes flew at record capacity for 11 consecutive months until June." READ MORE: Southwest has no regrets about free-bags stance (The Tampa Tribune) Keeping a lid on capacity also appears to have helped Southwest. The Associated Press writes "Southwest boasts about offering low fares, but that's not how it hit its financial targets. [The carrier's] average fare rose to $128.60 from $112.13 in the same quarter last year." That, AP adds, came as Southwest "shrank its passenger-carrying capacity less than 1%, quite a change from the days of heady growth. Southwest has continued to add new cities — Panama City, Fla., this spring, and two destinations in South Carolina next year — where it thinks it can undercut rivals' high fares, but it's paring flights elsewhere, including Las Vegas." On that note, the Las Vegas Sun writes Southwest's "recently announced new schedule removes 12 round trips from [Las Vegas] McCarran's schedule beginning in November. While the schedule adjustment is routine for Southwest and a seasonal change, it removes more than 1,600 incoming seats a day for the city." ORIGINAL POST (8:26 a.m. ET): In a story just crossing the news wire, The Associated Press reports: Southwest Airlines added an upbeat note to a strong quarter for the airline industry by reporting a $112 million profit for spring and early summer. The nation's biggest discount airline said Thursday that its adjusted earnings were 29 cents per share in the second quarter, enough to beat analysts' expectations. Revenue rose 21% thanks to a 15% increase in average fares during the start of the summer vacation period.The Dallas-based airline said business travel has strengthened but not fully recovered from pre-recession levels. But its core customer — the leisure traveler — has been packing planes. Southwest could set an all-time record for the percentage of seats filled in July. Southwest was the last of the big six carriers to report second-quarter results. All except American Airlines parent AMR made money due to higher fares and new fees on passengers.

@...Southwest Airlines (NYSE:LUV - News) today reported second quarter 2010 net income of $112 million, or $.15 per diluted share, compared to net income of $91 million, or $.12 per diluted share, for second quarter 2009. Both years’ results included special items related to non-cash, mark-to-market, and other items associated with a portion of the Company’s fuel hedge portfolio. Excluding special items for both periods, second quarter 2010 net income was $216 million, or $.29 per diluted share, compared to $59 million, or $.08 per diluted share, for second quarter 2009. The second quarter 2010 net income, excluding special items, of $.29 per diluted share exceeded Thomson’s First Call mean estimate of $.27 per diluted share. Additional information regarding special items is included in this release and in the accompanying reconciliation tables. Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated: “We are extremely pleased with our second quarter results. Second quarter net income (excluding special items) dramatically improved over second quarter last year, largely due to another record revenue performance. Total operating revenues reached an all-time quarterly record of $3.2 billion, a year-over-year increase of 21 percent. On a unit basis, our revenues increased approximately 22 percent, compared to second quarter last year, also an all-time quarterly record. Second quarter pretax margin (excluding special items) was 11 percent. Our second quarter 2010 earnings performance (excluding special items) was second-best in our history, behind second quarter 2006. This was, indeed, a strong performance, despite significantly higher fuel prices and other cost pressures. “We have made excellent progress toward generating revenue levels sufficient to reach our 15 percent pretax return on invested capital target. Although business demand has not fully recovered, it has strengthened, and consumer travel demand is robust. We experienced record traffic levels during the quarter, despite flat year-over-year capacity, demonstrating a continuing and significant market share shift to Southwest, in part due to our unique and successful ‘Bags Fly Free’ policy. Further, we led the industry with our year-over-year domestic passenger revenue and corresponding unit revenue performance. It is, without question, our Employees who make it possible for Southwest to remain such a great Company, and I am very grateful for their hard work and steadfast delivery of outstanding Service to our Customers. “After an array of revenue records set over the past three quarters, and based on current traffic and booking trends, an all-time record load factor is possible for July. We have built considerable, industry-leading revenue momentum that began in second half 2009. We see no signs that the momentum will stall in second half 2010. Based on traffic and revenue trends to date, we expect strong year-over-year unit revenue growth in third quarter 2010. Our year-over-year growth rates will face more and more difficult comparisons, of course, due to the rapid revenue recovery that began at Southwest a year ago. Each of the three years preceding 2009 experienced more normal seasonal trends and provide a better gauge of second half 2010 potential revenue health.” Second quarter 2010 unit costs, excluding special items, increased 13.6 percent from second quarter 2009, largely due to a 32.4 percent increase in economic fuel costs to $2.37 per gallon. Second quarter 2010 economic fuel costs included $39 million in unfavorable cash settlements for fuel derivative contracts. As of July 26th, the Company had derivative contracts in place for approximately 55 percent of its estimated third quarter 2010 fuel consumption at varying crude-equivalent prices up to approximately $100 per barrel; approximately 30 percent if market prices settle in the $100 to $120 per barrel range; and approximately 45 percent if market prices exceed $120 per barrel. Based on this fuel hedge position and market prices (as of July 26th), the Company estimates economic fuel costs, including fuel taxes, for third quarter 2010 will be in the $2.40 per gallon range. For fourth quarter 2010, the Company has derivative contracts in place for approximately 40 percent of its estimated fuel consumption at varying crude-equivalent prices up to approximately $95 per barrel; approximately 10 percent if market prices settle in the $95 to $120 per barrel range; and approximately 30 percent if market prices exceed $120 per barrel. The Company has derivative contracts in place for approximately 70 percent of its 2011 consumption at varying crude-equivalent prices up to approximately $95 per barrel; approximately 50 percent if market prices settle between $95 and $105 per barrel; and approximately 70 percent if market prices exceed $105 per barrel. Beyond 2011, the Company has coverage of approximately 60 percent of its estimated fuel consumption in 2012; approximately 50 percent in 2013; and approximately 45 percent in 2014 at varying price levels. The total market value (as of July 26th) of the Company's net fuel derivative contracts for the remainder of 2010 through 2014 reflects a net liability of approximately $227 million. Excluding fuel, second quarter 2010 unit costs increased 6.4 percent from a year ago, which was a smaller increase than anticipated primarily due to lower advertising and an $18 million refund of excess security fees charged by the Transportation Security Administration since 2005. Based on current cost trends, the Company expects a similar year-over-year increase in its third quarter 2010 nonfuel unit costs as compared to third quarter 2009’s 7.11 cents, which excluded a charge related to the Company's 2009 early-out program. “We are very pleased with the Customer response to our service to Panama City Beach, which commenced on May 24, 2010 with eight daily nonstop departures to four cities: Nashville, Houston Hobby, Orlando, and Baltimore/Washington,” stated Kelly. “During the quarter, we also celebrated the one-year anniversary of our successful introduction of the Southwest brand to the New York market out of LaGuardia, and we announced our intent to serve South Carolina with service to Charleston and Greenville-Spartanburg in 2011. "Given the current economic outlook and trends, we continue to approach route expansion through optimizing our flight schedule rather than fleet growth. We remain committed to reaching our financial targets before we return to any significant level of fleet growth. For 2010, our capacity will remain essentially flat with last year. For 2011, we are estimating a modest year-over-year capacity increase with no fleet growth. Although it is too early to commit, at present, we have no plans to grow the fleet in 2012, either. We will continue to monitor trends for changes and are prepared to adjust our schedule, accordingly.” The Company has updated its schedule to replace its 737 Classic fleet to improve its operational and economic efficiency and, accordingly, also updated its future firm orders and options with the Boeing Company with no net change to its fleet plans. The Boeing schedule revisions included conversion of six purchase rights to 2014 options, acceleration of three options (two from 2015 to 2013; one from 2016 to 2014), and exercise of 25 737-700 options for firm delivery in 2011 through 2016. In addition, the Company now has 98 purchase rights through 2021. Please refer to the revised delivery schedule included in this release for further information. Southwest Airlines’ recent recognitions and honors include: * For the seventeenth year in a row, Southwest led the airline industry in Customer Satisfaction according to the American Customer Satisfaction Index. * Executive Travel Magazine and their 2010 Leading Edge Awards recently honored Southwest by naming the Company the best North American Low Cost Carrier for its outstanding Customer Service. * Southwest ranked seventh among the top ten companies in MSN Money’s 2010 Customer Service Hall of Fame. * For the second year in a row, City Business Journals Network named Southwest the 2010 Grand Award winner in the travel category of the seventh annual American Brand Excellence Awards. * Computerworld named Southwest one of the 100 Best Places to Work in IT in 2010, a category which includes organizations that excel at providing Employees with great opportunities and benefits while demonstrating leadership through the use of information technology and strategic vision to align technology with business goals. * Airfarewatchdog recently announced the results of its 2010 survey of more than 2,100 savvy flyers, and Southwest Airlines ranked highest in two categories, "Best Bang for Your Buck" and "Friendliest Flight Attendants.” Southwest will discuss its second quarter 2010 results on a conference call at 11:30 a.m. Eastern Time today. A live broadcast of the conference call will also be available at southwest.com/investor_relations. Operating Results Total operating revenues for second quarter 2010 increased 21.1 percent to $3.2 billion, compared to $2.6 billion for second quarter 2009. Total second quarter 2010 operating expenses were $2.8 billion, compared to $2.5 billion in second quarter 2009. Operating income for second quarter 2010 was $363 million, compared to $123 million in second quarter 2009. Excluding special items, operating income was $414 million in second quarter 2010, compared to $183 million for the same period last year. Second quarter 2010 operating margin was 11.5 percent, and excluding special items was 13.1 percent. “Other expenses” were $179 million for second quarter 2010, compared to $16 million for second quarter 2009. The $163 million increase in total other expenses primarily resulted from $146 million in “other losses” recognized in second quarter 2010 versus $23 million in “other gains” recognized in second quarter 2009. In both periods, these “other (gains) losses” primarily resulted from unrealized gains/losses associated with the Company’s fuel hedging program. The cost of the hedging program (the premium costs of derivative contracts) is also included in "other (gains) losses”, and was $30 million in second quarter 2010 and $37 million in second quarter 2009. Second quarter 2010 interest expense decreased $5 million from second quarter 2009 primarily due to lower rates. The second quarter 2010 effective tax rate was 39 percent compared to 15 percent for the same period last year. The second quarter 2009 tax rate was impacted by the Company’s projections for full year 2009 financial results and the related impact that permanent tax differences were expected to have on those projections. Net cash provided by operations for first half 2010 was $913 million, and capital expenditures were $298 million, resulting in over $600 million in free cash flow. The Company expects to generate free cash flow for all of 2010, based on current trends and projected 2010 capital expenditures of less than $600 million. In addition to a fully available, unsecured, revolving credit facility of $600 million, as of July 26th, the Company had $3.4 billion in cash and short-term investments, which does not include $185 million in cash collateral held by its fuel hedge counterparties. The Company’s total fuel hedge collateral obligations, as of July 26th, also required approximately $165 million of aircraft collateral. Total operating revenues for the six months ended June 30, 2010 increased 16.6 percent to $5.8 billion, while total operating expenses increased 9.8 percent to $5.4 billion, resulting in operating income in first half 2010 of $417 million, versus $73 million in first half 2009. Excluding special items in both periods, operating income for first half 2010 was $516 million, compared to $213 million for the same period last year. Net income for first half 2010 was $123 million, or $.17 per diluted share, compared to breakeven results for the same period last year. Excluding special items, net income for first half 2010 was $239 million, or $.32 per diluted share, compared to $38 million, or $.05 per diluted share, for the same period last year.

@...Virgin Atlantic Airways has today unveiled a new aircraft livery and brand identity for the airline. The new design, which will be applied to all of the company's 38 aircraft, signage, communications and advertising was showcased on one of Virgin Atlantic's Boeing 747-400 aircraft G-VROC. (Logo: http://photos.prnewswire.com/prnh/20060927/NYW045LOGO ) (Logo: http://www.newscom.com/cgi-bin/prnh/20060927/NYW045LOGO ) Commenting on the new livery, Steve Ridgway, Chief Executive of Virgin Atlantic said: "We're a dynamic and innovative British company and our new livery will really make us stand out from the crowd, both in the sky and on the ground at airports all over the world. "Despite the most challenging economic conditions that we have encountered for some time, this is just one of many design projects that Virgin Atlantic has invested in. We have been working behind the scenes with British designers to re-ignite our brand and are developing new designs for the entire fleet of A330s due to come into service next year. "Virgin Atlantic has a strong history of investing during downturns and we believe that our new livery and the forthcoming delivery of the Airbus A330-300 signals another period of growth for the airline." The Virgin Atlantic name, previously on the front end of the fuselage is now emblazoned large across the whole of the aircraft in a fine custom drawn font. In addition, the undercarriage of the aircraft now features the new Virgin Atlantic logo in dark purple – making the aircraft more easily identifiable when taking off and landing. The winglets are now red with the Virgin script on the inner side, visible to passengers on board the plane. The new livery uses an entirely new paint system which is unique to Virgin Atlantic – a first on commercial aircraft. It has been specially developed to achieve a highly reflective depth of metallic color. The painting process has been simplified, using fewer maskings and applications for a drastic reduction in materials used. Over 450 liters of paint was used and took over 3,000 – 3,500 man hours to paint. The new paint is more durable so aircraft will only require re- painting once a decade. The iconic, flag carrying flying lady, who appears on all Virgin Atlantic aircraft, has been rejuvenated with a subtle cosmetic makeover and enhanced detailing – now fluttering a larger Union Jack. London brand agency Circus was commissioned in 2008 to review and refine the Virgin Atlantic brand values. The new livery and logo were developed by award winning design consultancy, Johnson Banks, in collaboration with the in-house brand design team, led by Joe Ferry and Nina Jenkins, and was created using the brand values defined by Circus. Dilys Maltby, Senior Partner, Circus, commented: "Virgin Atlantic makes every day a happier day. It is a tonic for the soul – delivering great product, and great experiences for customers all around the world. "Virgin Atlantic constantly challenges itself to see and do things differently and, through this piece of work, demonstrates its spirit of adventure and exploration." Michael Johnson, Creative Director, Johnson Banks, commented: "We've tried hard to retain the essential elements of Virgin Atlantic's first twenty-five years and refine them for the future. We've adapted the 'tail fin' to make it easier to use and to reflect a simpler and more elegant shape. The logotype has been replaced with a thinner and more elegant design that reinstates the pride in Virgin Atlantic's full name, and supplies more flexibility across a myriad applications." Joe Ferry, Head of Design for Virgin Atlantic, commented: "It is essential that we set a firm, confident foundation for the future of the Virgin Atlantic brand, one which is relevant in the new commercial environment. It's critical that we portray and live our differentiating brand values. "Last time Virgin Atlantic launched a new livery and corporate identity was in 2005."

@...China's Shanghai Airlines is to leave Star Alliance following the decision of its merger partner, China Eastern Airlines, to join rival SkyTeam. China Eastern opted for SkyTeam in April and, at the time, the consequences of the decision on Shanghai Airlines were unclear. Shanghai Airlines joined Star alongside Air China in 2007, the alliance's first members in the country. But Star Alliance says that Shanghai Airlines has agreed "to terminate its membership" by 31 October. Shanghai Airlines will continue to offer the associated alliance benefits until then. Star says the airline's decision results from the merger with China Eastern, although Shanghai Airlines has not confirmed that it will join SkyTeam.

- Archive of Past Editions