FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
2002
2002 - 3308.PDF
BUSINESS RESTRUCTURE MARY KIRBY / WASHINGTON DC BWIA edges back from bankruptcy Carrier hopeful of receiving government assistance as it outlines union concessions and cost-cutting measures BWIA West Indies Airways is cautiously optimistic it will secure government assistance this month and avoid bankruptcy, after its pilots agreed to concessions. Other employee groups continue to debate additional cuts. The airline aims to have a restructuring plan in place for its board meeting this week. The loss-making carrier has entered negotiations with Trinidad & Tobago government officials in the hope of winning a $13 million bailout, of which it anticipates $10 million would come in the form of a loan and the rest as a grant. "The $13 million will get creditors much more up to date with payments. We will also be asking them to spread the balance of payment over time," says BWIA. A decision by island govern ments in the Caribbean to provide BWIA partner Liat with new fund ing has also buoyed BWIA's chances of receiving assistance. Key to securing aid, however, is BWIA's ability to slash additional costs to achieve savings of $1 mil lion a month. BWIA has already cut $670,000 in non-labour costs, and $160,000 in labour costs - a significant portion of which was agreed to by pilots. The company has also resumed talks with the Aviation, Communication and Allied Workers' Union, which rep resents over half of BWIA's 3,000 employees and recently voted to turn down most of management's proposals. BWIA chief executive Conrad Aleong says: "It was a reasonable request to help find savings in areas where we pay third parties such as hotel bills. The pilots understood this and have given 100%. We hope others will now follow their lead." Management has also returned to the drawing board to identify additional cost-cutting areas. One option being considered is to form a joint venture company that would provide Bombardier Dash 8 maintenance to airlines through out the region, now that BWIA's own BWee Express Dash 8 airline is being shut down. •s BWIA pilots have agreed to take cuts to keep the carrier in the air E-BUSINESS Orbitz funding questioned as airline owners seek more bid Public debate over US online travel agent Orbitz is heating up amid accu sations that the web site continues to receive new funding from its airline owners while the same airlines request more US government aid. US lawmakers as well as Orbitz's main rivals in the travel distribution community are claiming loss-making Orbitz, which hopes to go public next year, is accepting cash amounts over and above the $205 million already contributed by its five airline owners -American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines and United Airlines. Orbitz declines to comment on suggestions that it has received as much as $25 million in additional money because the company is in the quiet period leading up to its initial public offering. Orbitz's owners, which benefited from a $15 billion US government bailout in the aftermath of 11 September, have been lobbying Congress to further relieve the industry of an estimated $4 billion in annual aviation security related costs. Congress has gone on a recess without authorising any relief. The International Travel Services Association (ITSA), a lobbying group representing online travel agents, believes continued assistance to the air lines will make Orbitz "a de facto federally subsidised online travel site". Florida congressman Felix Grucci says he finds it troubling that struggling majors are able to fully fund Orbitz, while US travel agencies face financial collapse because airlines have eliminated commissions. A preliminary Department of Transportation Inspector General's review of Orbitz has found no immediate reason to fault the company's business practices. A final report is expected shortly. The Department of Justice and a Congressionally mandated travel commission continue to review the site. BANKRUPTCY Delsey folds its wings Belgium's Delsey Airlines filed for bankruptcy on 5 November after owner Tony Gram failed to secure new finance. The airline launched operations in May as VG Airlines following the collapse of national carrier Sabena, operating from Brussels to US destinations Boston, Los Angeles and New York, and Yerevan in Armenia, using three ex-Sabena Airbus A330-200s. Load factors remained around 25% - and the airline was believed to be losing €124,000 ($124,300) a day. The aircraft were grounded on 24 October after Sabena Technics refused to provide maintenance due to unpaid bills. Sources say the airline's main problem was lack of a sales organisation in the USA. Talks with an unnamed Asian air line, reported to be interested in buying 65%, failed. VG Airlines founder, Freddy van Gaever - who shortly after its launch sold the airline to Gram, owner of the Delsey luggage brand - is investigating relaunching the airline. Van Gaever, founder of Belgian regional VLM, wants to fol low the example of Belgian airline TEA which went bankrupt in 1991 and was relaunched a week later as Euro Belgian Airlines and became a successful low-cost airline after it was sold to Richard Branson and rebranded Virgin Express. • The Belgian Court of Justice is investigating the sale of slots at London Heathrow airport by SN Brussels Airlines to British Airways and Virgin Atlantic. Shortly before Sabena was declared bankrupt last November, the airline transferred all its slots to its regional subsidiary Delta Air Transport (DAT), which subsequently formed the basis for Sabena successor SN Brussels Airlines. SN later sold nine slots at London Heathrow, a deal which has been declared illegal by Sabena's receiver, who says that Sabena did not have the right to "save" the slots from the bank ruptcy by transferring them to DAT. 32 12-18 NOVEMBER 2002 FLIGHT INTERNATIONAL www.flightinternational.com
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
