Republic Airways reports $7.1M loss for Q1 | UPS reports Q1 profit of $970M | HR executive testifies about AMR's need to reduce labor costs
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April 27, 2012
Airlines for America SmartBrief
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Company Watch
Spirit Airlines keeps focus on profitability, CEO says
Ben Baldanza, the CEO of Spirit Airlines, credits the simplicity of the low-cost carrier's business model for its success. "We expect every route to make money. Not half of them, not 99%," he said. In contrast to other airlines, Spirit does not look at market share as a signpost of success. (U.K.) (4/26)
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Republic Airways reports $7.1M loss for Q1
Republic Airways Holdings posted a net loss of $7.1 million for the first quarter. Subsidiary Frontier Airlines narrowed its loss to $21.6 million for the quarter, compared with $39 million in the same quarter last year. "We saw really good year-over-year improvement at Frontier," said Bryan Bedford, chairman and CEO of Republic. "[But] a loss is still a loss." American City Business Journals/Denver (4/26)
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UPS reports Q1 profit of $970M
United Parcel Service reported net income of $970 million for the first quarter, compared to $915 million for the same quarter last year. Total revenue for the Atlanta-based company's quarter rose to $13.1 billion from $12.6 billion on a year-over-year basis. American City Business Journals/Louisville (4/26)
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HR executive testifies about AMR's need to reduce labor costs
Jeffrey Brundage, senior vice president of human resources for American Airlines, testified in bankruptcy court this week about the need to reduce labor costs. AMR Corp., the parent company of American, filed for bankruptcy in November. "My goal pre-bankruptcy was to get whatever might be possible to move forward," he said. "Post-bankruptcy, it was, what do we absolutely need to restructure?" Bloomberg Businessweek (4/26), Reuters (4/26)
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Inside Aviation
Airbus will pay for repairs on A380 wings, COO says
Airbus will pay about $139 million to repair cracks in the wings of its A380 through its warranty program. "This is a maintenance issue -- it has nothing to do with the safety of flights. It is unfortunate we have to replace some of those parts but it happens," said Airbus Chief Operating Officer John Leahy. Google/Agence France-Presse (4/26)
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Tornado did not destroy Boeing programs, CEO says
Boeing said a tornado in Wichita, Kan., that shut down supplier Spirit Aerosystems shouldn't greatly affect its bottom line. "We are cautiously optimistic that there will be no material impact to any of our programs this year," said Jim McNerney, Boeing chairman, president and CEO. The Wichita Eagle (Kan.) (4/25)
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Energy Bulletin
Indian will ask nation's airlines to boycott EU ETS, official says
India plans to ask the country's airlines to boycott the European Union's emissions-trading scheme. "We have lots of measures to take if the EU does not go back on its demands. We have the power of the economy; we are not bleeding as they are," said a senior Indian government official. Reuters (4/27)
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Business Tips and Advice
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Regulatory Update
A4A supports safety approach that relies on data
Airlines for America representatives testified before the House Subcommittee on Aviation on a safety approach for the industry that relies on data. "We operate at a higher level of safety because we have become much better at identifying and managing risk and the demonstrated effectiveness of our safety systems, which gives us the confidence to undertake change, when warranted," said Thomas Hendricks, A4A senior vice president for safety, security and operations. (U.K.) (4/27), Murphysboro American (Ill.) (4/25)
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Industry Trends
Column: United switch to reservations system proved a challenge
Columnist Christopher Elliott said United Airlines' switch to a different reservations system illustrates some of the challenges in an airline merger. "Call volumes surged from 1.5 million the week before the cutover to 2 million the week of the switch, exceeding what managers had planned for by 10 percent," Elliott writes. The Washington Post (tiered subscription model) (4/26)
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Las Vegas airport posts 2.5% jump in passenger count
Strong growth from carriers such as JetBlue, Spirit and Virgin America fueled a 2.5% increase in passenger numbers at Las Vegas' McCarran International Airport in March over last year. Separately, legacy carriers except American Airlines showed a decline in numbers for the month. Las Vegas Review-Journal (4/27)
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Career Development
3 ways to help your organization soar to success
Leaders need three things to keep their organization flying high, says Craig Fuller, CEO of the Aircraft Owners and Pilots Association. First, develop a clear strategy; next, recruit the best people you can find; and finally, make sure that you have the right people in the right roles. "Get these things right, and success will follow," Fuller promises. SmartBrief/SmartBlog on Leadership (4/25)
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Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen."
-- John Steinbeck,
American writer
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