Topics: Horizon, Caribbean Sun, Republic, Pinnacle/Northwest, Mesa/KunPeng/Hawaiian, TransStates, Embraer/Virgin Blue/JetBlue.

Regional Losses Mount at Alaska
Alaska Airlines reported to the SEC that its regional operations, including Horizon, will post a loss for 2007. Regional services are expected to break even in the third quarter but costs will rise faster than revenues in Q4. Consequently, feeder services should mirror the losses for the first half. Indeed, Calyon Securities Analyst Ray Niedl said Horizon was in need of a major restructuring. Related Story www.aviationtoday.com/ran/categories/commercial/14342.html. It added the loss will be bigger than but not a multiple of the $13.2 million lost during the first half by Horizon.

Caribbean Sun to Become 737 Operator
Caribbean Sun Airlines Inc. which ceased flights in January after four years of service, said it will re-launch by the end of 2007, this time trading in its Dash 8s for Boeing 737s. It is currently recruiting pilots. Caribbean Sun’s re-launch follows a comprehensive six-month restructuring program to identify new growth opportunities and re-focus operations for greater profitability. Re-launch plans are subject to regulatory approvals from the U.S. Department of Transportation (DOT) and the Federal Aviation Administration (FAA). Details concerning Caribbean Sun’s corporate leadership, new route structure and other operational issues will be disclosed following receipt of all government regulatory approvals.
As part of its efforts it also introduced a new brand identity. Developed by Aerobrand, Inc., the new design centers on the stylized image of a pineapple, the universal, and embodies the image of the sun, providing a fresh spin on the airline’s original corporate identity. Its new livery incorporates blue, green and yellow.


Porter Airlines Expands TCCA Terminal
As it prepares to launch Toronto-New York service, Porter Airlines is expanding its operations base at Toronto City Center Airport. After less than a year in service, construction begins this month on an extended terminal, including three additional arrival and departure gates. Related Story http://www.aviationtoday.com/ran/categories/commercial/6238.html The project is scheduled for completion by December 31, and will offer more computer work stations in addition to free wireless internet access. Porter’s terminal investment is driven by the airline’s strong financial performance, including average monthly revenue growth of over 20 percent since beginning flights October 23, 2006. June saw a net-profit margin of eight percent.
In addition to its new Toronto-Newark route, it plans on expanding its route network in 2008 to other U.S. points.

Republic To Lose More Pilots, Buys Back Stock
Republic Airways Holdings (RJET) will lose about 80 pilots as US Airways recalls all pilots made available to the regional carrier under the jets-for-jobs program. The losses will come between November 2007 and April 2008.
Republic has already expanded its pilot recruitment and the news prompted it to announce it will spend $3 million to train new pilots in the fourth quarter ’07 and in the first quarter ’08. If it cannot keep up with pilot demand, it also said it may be forced to temporarily reduce its US Airways operation. RJET will provide further guidance during its third-quarter earnings conference call in late October.
In a separate move, RJET purchased two million shares of its common stock from WexAir LLC, its former majority stockholder at a price of $19.20 per share or $38.4 million. The purchase was authorized under a previously announced $100 million share repurchase program. Related Story

Pinnacle’s Airlink Program Expands to NY
Northwest (NWA) is using Northwest Airlink Pinnacle Airlines (PNCL) to expand its LaGuardia service to Des Moines, Flint and Madison beginning November 4. The new year-round services will be served by 50-seat Bombardier CRJ200 regional jets.

Kun Peng to Launch Next Week
Mesa Air Group set September 16 as the launch date for its new partnership for KunPeng Airlines which starts with two CRJ 200s. The first flight will fly between Xian and Shenzhen. The partnership with Shenzhen Airlines could ultimately include a fleet of 200 aircraft. Mesa provides the pilots, aircraft, training and maintenance.

Mesa Reportedly Destroyed Evidence
The Honolulu Star Bulletin reported allegations by Hawaiian Airlines that Mesa Chief Financial Officer Peter Murnane destroyed evidence required in the case it has against the parent company of go! Airlines. Its lawsuit against Mesa, seeking monetary damages and a year-long injunction
against go! ticket sales, is scheduled for trial September 25 in U.S. Bankruptcy court. It charges Mesa used investment proposals to gain confidential competitive information later used in its launch of go!. The newspaper quoted a filing by Hawaiian saying Murnane “engaged in willful and deliberate spoliation of evidence on three of his computers” despite orders by his own attorneys to preserve the evidence. The airline cited an e-mail Murnane wrote asking how to delete files so it would seem they never existed on the hard drive. Signs of program deletions were on two laptops used by Murnane along with his home computer, said Hawaiian.

Trans States Begins STL-SPI Jet Service
American Connection Trans States Airlines will link St. Louis with Illinois Capital Springfield beginning November 4. It will use the Embraer ERJ 145 on the new service for the two roundtrips daily.

First ERJ 170 Jet Is Delivered to Virgin Blue
Embraer delivered the first ERJ 170 jet to Australia's Virgin Blue Airlines Pty Ltd., the first Pacific-based airline to sign with Embraer. Virgin Blue has six firm orders for the ERJ 170 and 14 for the ERJ 190. The E-Jets will be the backbone of the airline's expansion. In November 2006, Virgin Blue placed an initial order for three ERJ 170's and 11 ERJ 190's. In April 2007, the airline confirmed three 170 options and three 190 purchase rights, for the current total of 20 firm orders. The company also has three options for the 190 and 17 purchase rights. Virgin Blue's 170s are configured with 78 seats, while the 190s has104 seats, both in single-class configuration. The 190 will be the first of the family in the world to fly under the ETOPS (Extended-range Twin-engine Operational Performance Standards) certification, starting in the first half of 2008.