Airlines Updates, January part 1

Passenger Airlines Have Most Profitable Quarter Since 1999

A group of 20 selected passenger airlines reported a system operating profit margin of 8.2 percent in the third quarter of 2007, the highest third quarter profit margin since 1999 and the first time since 2000 that airlines have had six consecutive profitable quarters, the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation has reported.

The 20-carrier group consists of the seven largest network, low-cost and regional carriers based on operating revenue. (Source: DOT press release).

MAXJet Folds, But Discount Premium Transatlantic Model Still Flies
Two-year-old MAXjet declared Chapter 11 on Christmas Eve, leaving planes on tarmacs and stranding some passengers at the start of the holiday. The carrier cited fuel prices and their impact on the credit climate for airlines, but some analysts said that competition from American Airlines on one of MAXjet’s crucial routes, its JFK-Stansted service, was also a factor.

The airline offered all-premium flights between London and New York, Las Vegas and Los Angeles. The carrier contracted with Eos Airlines for seats on Eos’ scheduled all-Premium service to accommodate passengers awaiting a return flight between New York and London.

Meanwhile, Jack Williams, president and CEO of Eos, said it was doing well, setting record passenger numbers, adding 12 new flights in October and taking delivery of its fifth and sixth aircraft.

The carrier recently secured $50 million in equity capital from institutional and private sources. Meanwhile, both British Airways and Virgin Atlantic were reportedly planning their own all-premium class service.

Lufthansa has been flying its own all-business class service, Business Jet, between Newark and Frankfurt, for about two years. (Source: MAXjet, Eos press releases,

Lufthansa Acquires 19 Percent Stake in Jet Blue
Lufthansa is making a minority equity investment in JetBlue, the first significant investment by a European air carrier in a U.S. point-to-point air carrier. Lufthansa is buying approximately 42 million newly issued common shares of JetBlue, or 19% of JetBlue’s equity.

Dave Barger, JetBlue’s CEO, said the deal was an endorsement of JetBlue’s growth plans and would also improve the airline’s balance sheet and give it more financial flexibility. (Source: JetBlue press release).

Spare Lithium Batteries No Longer Allowed in Checked Baggage
Loose lithium batteries in checked luggage are no longer allowed under new Department of Transportation safety rules.

Lithium batteries are allowed in checked baggage if they are installed in electronic devices, or in carry-on baggage if stored in plastic bags.

Common consumer electronics such as travel cameras, cell phones, and most laptop computers are still allowed in carry-on and checked luggage.

However, the rule now limits you to only two extended-life spare rechargeable lithium batteries, such as laptop and professional audio/video/camera equipment lithium batteries in carry-on baggage. Lithium batteries are considered hazardous materials because they can overheat and ignite in certain conditions.

Safety testing conducted by the FAA found that current aircraft cargo fire suppression system would not be capable of suppressing a fire if a shipment of non-rechargeable lithium batteries were ignited in flight.

The DOT’s Pipeline and Hazardous Materials Safety Administration is working to create public awareness of the issue. (Source: DOT press release).

South African Airways SAA Announces Buy-One-Get-One-Free
South African Airways has launched a “Buy-One-Get-One-Free” program for its flights from New York or Washington, D.C., to Johannesburg, Cape Town or Durban, South Africa, for travel from Jan. 15 through March 1, 2008.

Now when travelers buy one airline ticket on South African Airways, they can receive the second ticket free.

The fare, available for purchase through Jan. 22, 2008, is $1,350 for the first passenger and free for the second passenger. Taxes and fuel surcharges apply and travel must be completed by March 14, 2008. (Source: SAA press release).