Quick Takes – Travel Demand Down, Porter, Embraer/Finnair, Precision/ATR, Continental

Economy Dampening Corporate Travel Demand While most airlines reported no indication of changes in corporate travel budgets, during their year-end investment conference calls, signs are beginning indicated that the weakening economy is doing just that. Industry analysts blame not only the economy but the...

For immediate service; more information; and multi-user access (site license), non-profit organization, educational institute pricing, contact Karen Garner kgarner@accessintel.com at (301) 354-1612.

This story is only available to paid subscribers. Please login below with your username and password if you are a subscriber.

Username:
Password:
	What is my password?

Subscribe     Trial

Economy Dampening Corporate Travel Demand
While most airlines reported no indication of changes in corporate travel budgets, during their year-end investment conference calls, signs are beginning indicated that the weakening economy is doing just that. Industry analysts blame not only the economy but the increasing hassle factor, noting that travel costs are one of the few controllable expenses.

Porter Airlines exercises options on Q400s
Porter Airlines exercised existing options for two Bombardier Q400 aircraft. The order represents aircraft 11 and 12 in the Porter fleet, scheduled for delivery in early 2009.
Porter’s initial 10-firm, 10-option Q400 order is valued at over $500 million. The value of the latest contract at Q400 aircraft list prices is approximately $51 million. “This aircraft sparked a resurgence in turboprop travel around the world,” said Steven Ridolfi, president, Bombardier Regional Aircraft. The order puts the Q400 order book at 282, with 190 delivered as of January 31, 2008. Six Porter aircraft are delivered and in service, with four more expected by the end of 2008.
“Porter is in a strong financial position and is poised for further growth to new markets as demonstrated by the exercising of these two options,” said Robert Deluce, president and CEO, whose airline launched cross-border operations into the U.S. to Newark from Toronto’s downtown airport. “The Q400 has performed fantastically for us and it remains a key part of Porter’s expansion plans.”

Embraer Signs Finnair to Three More ERJ190s
Embraer signed Finnair to a new firm order for three more ERJ 190s, increasing the airline’s firm order to 23. The total value of the agreement, at list price, is $112.5 million for the three new aircraft which will be configured with 100 seats in a dual-class layout. First delivery is scheduled for 2010.
Embraer and Finnair initially signed for 12 ERJ 170 jets in 2004, with options for another eight aircraft of the E-Jet family. In 2005, the airline expanded its order to include the ERJ 190, by converting two firm orders and confirming four options. The remaining four options of the original contract were confirmed in November 2006 and, with today's announcement, Finnair raises the total number of E-Jets firm orders to 23.
"Finnair has enjoyed a year of solid growth and strong profitability,” said Henrik Arle, the head of Finnair scheduled traffic. “The E-Jets continue to form a key part of our forward growth strategy, enabling us to have the right size aircraft to meet route demand and ensuring that we offer optimum flexibility and comfort in our key feeder and point-to- point traffic. We are very satisfied with the highly favorable economics of our E-Jets, especially the ERJ 190, which greatly complements our narrow-body jet fleet."
The Finnish airline currently operates 10 ERJ 170s and six ERJ 190s, and has one of the largest E-Jets fleets in Europe. The seventh ERJ 190 was delivered last week in Sao Jose dos Campos, Brazil.

Precision Air Takes First ATR 72
Tanzania’s Precision Air Services took delivery of its first ATR 72-500, the delivery following a 2006 deal for the purchase of six new -500s. In 2007, the airline booked an additional ATR 42-500. With these seven new ‘-500 series’ aircraft (five ATR 72-500s and two ATR 42-500s), Precision Air Services will renew its ATR fleet, which today consists of four ATR 42-320s and three ATR 72-210s. The remaining six ATRs are to be delivered from 2008 through 2010.
“The ATRs are very well adapted to the extreme weather conditions of Africa, and have proven themselves to be extremely reliable throughout our network,” said Precision Chair Michael Shirima,. “The performance of the ‘-500s’ in hot and high environments will allow us to optimize our operating costs and will successfully contribute to the expansion of our network.”
“There is a vast presence of the ATRs in Africa, operating in some 20 countries,” said ATR CEO Stéphane Mayer. “In the last two years, we have also sold almost 30 new aircraft to African carriers, a success that confirms the growth of the regional networks across the continent. Because of their ability to operate in all kinds of operating environments, with their ease of maintenance, reduced operating costs and environment friendliness, the ATR aircraft are very well adapted to the regional routes in Africa”.
Adding to the deal signed in 2006, ATR and Precision Air Services inked an educational program aimed at training a number of selected Tanzanian students in aeronautical maintenance engineering.
Precision Air Services was established in 1993. The airline offers the widest connections to all major towns in Tanzania and, regionally, to Kenya, Uganda, and soon, to Angola and Democratic Republic of Congo.
ATR had a record year last year with orders for 113 new aircraft. Since the beginning of the program, ATR sold 953 aircraft (417 ATR 42s and 536 ATR 72s) and has delivered 758 (397 ATR 42s and 361 ATR 72s), thus posting a current backlog of 195 aircraft.

Continental Airlines Begins New CLE Nonstops
As part of its Cleveland expansion, Continental Airlines will begin new daily Express operations from its Cleveland hub at Hopkins International Airport to three new cities – Greensboro, N.C.; Omaha, Neb.; and Savannah, Ga.
The new cities are part of Continental's expansion, underway at Cleveland, that will add 12 new domestic nonstop destinations this year, in addition to previously announced new service to Paris. Other new destinations from Cleveland will include Birmingham, Ala., Charleston, S.C., Green Bay, Wis., Tulsa, Okla., Little Rock, Ark., Memphis, Tenn., Lansing, Mich., Des Moines, Iowa and Kalamazoo, Mich. Savannah is Omaha will be served by ExpressJet while XJT and Chautauqua were both tapped for the Greensboro service.