Air Transport World

US Majors.(Statistical Data Included)

33.63% of world passengers

33.76% of world RPKs

23.40% of world FTKs

Alaska Airlines: Continuing to prosper while a step away from a full-fledged alliance relationship, Alaska Airlines posted a record pretax profit of $190.5 million in 1998, up from $127.4 million in 1997, on an 8.2% increase to $1.4 billion in revenues. Boardings climbed 6.3% and RPKs advanced 8.6%.

Parent Alaska Air Group, which includes Horizon Air, recorded net income of $124.4 million, a hefty increase from the $72.4 million record set in 1997, as revenue climbed 9.1% to $1.9 billion. Sustaining that trend into this year, AAG posted first-quarter profits of $20.2 million, up from $13.1 million, on revenues of $461 million, a 10.8% increase. RASM was unchanged while CASM decreased 0.8% due to lower fuel prices.

However, the airline was knocked off track by a mid-April employee slowdown, first by customer service and ramp agents and then by mechanics, causing hundreds of flights to be canceled and delaying many more.

A large niche airline that uniquely operates as a high-quality, low-cost carrier, Alaska has established partnership agreements, including some codesharing, with Northwest, Canadian, Continental and American but has not committed exclusively to any of the major alliances.

American Airlines: Never a dull moment for American. Riding the vigorous economic conditions to best effect, parent AMR Corp. posted net earnings of $1.3 billion in 1998, up 33% from 1997. But shortly after announcing its profits early this year, American's purchase of Reno Air triggered an illegal pilot sickout that cost the airline and the Allied Pilots Assn. millions of dollars in losses for the airline and court fines for APA.

Then in May the US Department of Justice finally dropped the hammer on an antitrust case it had been investigating for two years, suing American for engaging in predatory practices for its style of competing from its Dallas/Fort Worth International Airport hub (see article, p. 30).

May 1998 saw the retirement of long-time AMR chief Robert Crandall and the ascension of Donald J. Carty to the posts of chairman, president & CEO. Responding to the semimerger of Northwest and Continental, Carty led American into an intensive joint marketing agreement with US Airways in the domestic market that baked frequent-flier programs and airport clubs. US Airways already had signed with AMR to turn its IT functions over to Sabre.

AMR's American Eagle Regional subsidiary, consolidated into one carrier from three of the four previous entities, launched American's first regional jet service, putting 20 Embraer ERJ-145s into operation last year while ordering 75 smaller ERJ-135s.

AMR in 1998 finished buying an equity position in Aerolineas Argentinas and agreed to take 1% of Iberia. And American took the first 10 aircraft ordered as part of a 20year "preferred supplier" agreement with Boeing.

More than two years in the making, the oneworld alliance was announced in late 1998 and launched early this year with American and British Airways as the keystone members.

AMR's Airline Group reported a 1998 pre-tax profit of $1.79 billion, up from $1.3 billion, on revenues of $17.5 billion. American's RPKs rose a skimpy 1.8% but a 0.9% increase in yield, driven by rising domestic fares as international yield declined; helped push breakeven load factor do to 59.9% as passenger load factor hit 70.2%. American's RASM of 9.46 cents was up 1.7% while CASM declined to 9.25 cents.

Suspecting a business slowdown, American advanced retirement of eight DC-10-10s and two 727-200s into this year and pulled back on previously announced international expansion plans.

In mid-May, American and the Assn. of Professional Flight Attendants announced a tentative agreement, Abandoning the position-based bargaining that resulted in a 1993 strike, the two sides adopted interest-based bargaining to achieve their accord.

America West: While the year end numbers were looking rosy for America West and the first quarter continued the trend, all was not well in the head office. A reorganization of the executive suite saw the departure of President & CEO Richard Goodmanson with William A. Franke, chairman & CEO of parent America West Holdings, reassuming Goodmanson's duties with the airline.

The reorganization created two new corporate organizations: The operations group, led by newly appointed Executive VP & COO Gilbert Monk, formerly of FedEx, and the corporate group, headed by Executive VP Douglas Parker, formerly the airline's senior VP & CFO.

The reorganization was preceded by a few weeks by an announced tentative solution to a long-simmering contract dispute with the flight attendant union that threatened to spill over into a job action. The contract was approved shortly after the reorganization.

Also early this year, America West said it had stopped talking with potential suitors, a process reportedly involving United. Franke said the company was committed to maintaining an independent course although it retains a marketing relationship with Continental, which holds a right of first refusal to acquire it. …

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