The European Commission clears Lufthansa's comprehensive commercial alliance with SAS, with conditions.

Acomplaint by UK regional CityFlyer Express prompts the European Commission to order Belgian carrier VLM to pay interest on a $670,000 unsecured loan from the Flemish government.

AI(R)partners Aérospatiale, Alenia and British Aerospace set up a Beijing-based consortium, Aero International Asia (AIA), with a view to partnering China in manufacturing the AE-100 jet.

Senior Asia-Pacific administrators meet for an aeropolitical summit in Kyoto, Japan, where opinions diverge over open skies in the region.

The European Commission proposes unlimited liability regulation for European carriers, in reply to Iata's proposed voluntary agreement.



The US and Germany reach a tentative open skies accord.

Dasa withdraws financial support for Fokker, after Dasa and the Dutch government fail to agree on its proposed DFl 2.3 billion ($1.4 billion) recapitalisation.

The FAA threatens to downgrade Venezuela from Category II to Category III status, which would bar its carriers from the US.

Airline Investors Partnership takes a $20 million controlling stake in Hawaiian Airlines.



Dutch manufacturer Fokker is declared bankrupt.

Sabena's and Alitalia's respective chief executives Pierre Godfroid and Roberto Riverso are fired due to lack of success, while Olympic Airways' chief executive Rigas Doganis is also ousted, despite putting the carrier back in the black.

SAS complains to the European Commission about price leading by Air France, in breach of its state aid


Air France pilot unions SNPL and SPAC agree to a 30 per cent productivity increase with no extra pay.

EVA Air takes a 30 per cent stake in regional carrier Taiwan Airlines.

China's new aviation law causes consternation over changes in aircraft mortgages, leases and liens.

European Civil Aviation Conference members adopt the 'flexible use of airspace' policy, which releases military airspace for civil use.



The no-frills UK carrier EasyJet starts its first service from London/Luton to Amsterdam and the Virgin Group takes over 90 per cent of Euro-Belgian Airlines to form Virgin Express.

The European Commission blocks the second tranche of Olympic Airways' state aid.

Swissair switches all longhaul flights to its Zürich hub at the expense of Geneva.

Aviation Industries of China and AIA sign a letter of undertaking to develop the AE-100 regional jet.

Air France introduces a five-wave flight system at its Paris/Charles de Gaulle hub.

A fire severely damages Düsseldorf airport's passenger terminal.

Xiamen's airport authority goes public with a share offering on the Shanghai stock exchange.



The US

Department of Transportation gives tentative approval to the United-Lufthansa application for antitrust immunity.

ValuJet's Flight 592 crashes into the Florida Everglades, prompting the low-cost carrier's demise.

Cathay Pacific, the Swire group and Citic Pacific agree to sell equal shares in Hong Kong's Dragonair, making China National Aviation Corporation Dragonair's largest single shareholder.

British Midland's parent Airlines of Britain buys Scottish carrier Business Air.

Danish regional Sun-Air signs a franchise deal with BA and becomes the first non-UK carrier operate under the British Airways Express brand.

UK startup World Airlines starts services from London/ City to Amsterdam.

Indonesia's Sempati Air sells 40 per cent of its equity in a private placement to Asian Aviation, an Indonesian-Malaysian consortium.

Lufthansa ends its technical deal with Modiluft, following the Indian's carrier's failure to meet its payments.

Malaysia Airlines raises $200 million in a share placement.

Northwest Airlines and Air China near a strategic alliance by signing an MoU.



British Airways and American Airlines announce their intention to form a comprehensive alliance.

Delta receives antitrust immunity for its alliances with Swissair, Sabena and Austrian Airlines.

The European Commission launches an investigation into the proposed BA-American tie-up and the five existing transatlantic alliances: Lufthansa-United; SAS-United; Swissair-Sabena-Austrian Airlines-Delta; KLM-Northwest; and BA-USAir.

The Commission is mandated by member states to enter bilateral talks with the US on 'soft rights' issues.

British Airways and Luft-hansa introduce aggressive cost-cutting programmes, while unions at Air France and Alitalia resist restructuring measures.

ValuJet is grounded following a federal safety audit documenting 30 instances of unsafe operational practices before and after the crash of Flight 592.

New Zealand's Commerce Commission approves Air New Zealand's bid to take a 50 per cent stake in Australia's Ansett.

Italian startup Alpi Eagles goes head-to-head with Alitalia on Venice-Rome.

A bid by a Maersk Air-led consortium beats offers from a SAS consortium and BIUSAfor a 66 per cent stake in Estonian Air.

UK startup Debonair Airways begins operations from its London/Luton base to Munich, Düsseldorf/Express and Barcelona.

Fairchild Aircraft buys 80 per cent of regional aircraft manufacturer Dornier.

Airbus Industrie and its four owners begin negotiations to form a limited company.



Air France chairman Christian Blanc abandons plans to merge Air France's shorthaul operation into Air France Europe, deciding to integrate the former Air Inter into the Air France group instead.

ValuJet files a plan of operational and management reorganisation to the US Federal Aviation Administration.

TWA Flight 800 crashes off New York's Long Island.

Belgian carrier VLM files a predatory pricing complaint with the European Commission against CityFlyer Express.

South African independent Comair becomes the first British Airways branded franchisee outside Europe.

Saudia changes its name to Saudi Arabian Airlines.

Modiluft threatens a $100 million lawsuit against Lufthansa alleging breach of contract.

Hainan Airlines applies to list up to 30 per cent of its shares on the Shanghai stock exchange, to become the first Chinese carrier to go public.

EVA Air increases its stake in Taiwan Airlines from 30 to 40 per cent, while China Airlines agrees to buy a third of Formosa Airlines.

Canadian Airlines and Air Canada cap travel agent commissions at US$50 on transborder flights to the US.



USAir launches a lawsuit against its partner British Airways and American Airlines over their planned alliance.

Startups World Airlines, EasyJet and VLM file individual complaints with the European Commission over alleged anti-competitive behaviour by incumbents Air UK, KLM and CityFlyer Express respectively.

BAsays it will acquire the remaining 50.1 per cent in TAT, giving it 100 per cent of the French carrier.

Norway's Braathens Safe buys a 50 per cent stake in the scheduled carrier Transwede Airways.

Middle East Airlines receives a capital injection totalling $225 million.

Delta Air Lines launches its low-fare Express product.

All Nippon Airways and Air Canada start codesharing on Osaka-Vancouver.

Startup World Airways ceases operations.

Canadian Airlines and Air Canada lift the travel agents commission cap on transborder flights to the US.



USAir offers to drop its lawsuit against BA and American in return for Heathrow slots to relaunch its own transatlantic services.

Pan Am is reborn and ValuJet resumes operations.

French independent Air Liberté enters receivership.

The UK government imposes stringent noise limits at London/Heathrow, Gatwick and Stansted.

Virgin Express accuses SAS of predatory pricing on Copenhagen-Brussels.

TAM signs a management contract to run the Paraguayan flag carrier Lapsa.

Iata files its intercarrier liability agreement with Brussels.



Alitalia seeks approval from the European Commission for a US$2 billion capital injection and faces accusations of predatory pricing and collusion on slots. The carrier also launches a low-cost operation, Alitalia Team, and forms a codeshare agreement with startup Alpi Eagles.

British Airways announces a $1.5 billion cost-saving programme to include 5,000 redundancies and widespread outsourcing.

Lucio Tan invests $190 million in Philippine Airlines, and increases his shareholding to 57 per cent.

Deutsche BA sells its turboprop operations to Nantes-based Regional Airlines.

Air Canada and SAS announce a partnership and SAS launches lower-fare product SAS Express.

Jersey European Airways becomes an Air France franchisee, while Augsburg Airways enters a franchise deal with Lufthansa.



The US DOT awards antitrust immunity to United's alliances with Lufthansa and SAS.

Air France signs letters of intent for broad cooperation with Delta Air Lines and Continental Airlines.

British Airways takes a 67 per cent stake in Air Liberté for $86 million, as part of a recovery plan to bring the carrier out of bankruptcy. French banking group Rivaud takes the other 33 per cent stake.

McDonnell Douglas scraps plans to develop the MD-XX long-haul jet.

Sudan Airways is effectively grounded by a UN-imposed air embargo.

Lufthansa launches legal action to recover three B737-200s from its former partner Indian partner Modiluft.

Alitalia is stripped of its slot coordination powers at Italian airports.

A Saudia Boeing 747 and a Kazakhstan Airlines Il-76 collide near Delhi.

Swissair and Austrian Airlines sign a deal to buy 18.37 per cent of Ukraine International Airlines.



The UK Office of Fair Trading sparks off a storm among US carriers by recommending that British Airways and American should sell or lease 168 weekly Heathrow slots in order to gain approval for their proposed alliance.

The German government opts to sell its remaining 35.7 per cent in Lufthansa in a deal with the state-owned bank Kreditanstalt für Wiederaufbau.

KLM moves to buy back 13 per cent of its equity from the the Dutch state.

Modiluft sues Lufthansa alleging loss of reputation.

The new London noise rules are suspended by the High Court, pending a review, following an appeal from Iata.

Increased fuel prices force Iata member airlines to seek a 3 per cent hike in international fares.

American Airlines chooses Boeing as its exclusive supplier for the next 22 years.

Alitalia is fined by the Italian antitrust authorities for anti competitive behaviour against Air One and Meridiana.

New Belgian low-fare longhaul airline City Bird commences operations.

Italian new entrant Azzurra Air starts its first services.

The AE-100 project moves into the ambit of Airbus.

USAir changes its corporate identity, including a name change to US Airways.

Sempati Air delays its initial public offering.

Source: Airline Business