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Monday, April 4, 2005

Quick Takes

  • Speaking of US Airways, the carrier now plans to exit its second Chapter 11 bankruptcy by Aug. 31. Under an accord it signed earlier this year with GE Commercial Aviation Services (GECAS), US Airways had promised to leave bankruptcy by June 30. While the carrier has secured $250 million in exit financing from Air Wisconsin and Republic Airways [RJET], it still needs at least $100 million more in new equity. The bankruptcy court last week approved the deal with Republic, which included the provision that at least $350 million in new equity would be needed. The court has given US Airways until May 31 to file its reorganization plan. That plan was originally due last week. The carrier told the court that the high cost of fuel is complicating the final plan. The carrier estimates it will now spend at least $500 million on fuel this year that what it had budgeted.
  • After successfully guiding the development of the Embraer [ERJ] 170/190 family, the Brazilian company has tapped Luis Carlos Affonso to guide the development of a fleet of corporate jets. Embraer's current family of corporate jets was introduced in 2000 and was based on the ERJ 135 platform. In the three years since the Legacy line has been certified, Embraer has sold 49 planes. With the hot sales of its 170/190 line, Embraer expects to pad its cash balance in 2005 from $22 million to $400 million. In its announcement, Embraer did not tip its hand as to what the new corporate aircraft would look like or the amount of money it would spend developing these niche aircraft. Archrival Bombardier, the Canadian company, is now selling more corporate jets than RJs. Its line runs the gamut from Learjets to models based on its CRJ 200 series.
  • It has been determined that too much weight was a contributing factor to the Feb. 2 crash of a Bombardier Challenger CL-600 in Teterboro, N.J., according to a preliminary report from the National Transportation Safety Board (NTSB). The plane, operated as a charter by Platinum Jet Management, failed to take off. Instead, it crashed through the airport's perimeter fence, crossed a highway and struck a warehouse. While none of the eight passengers were seriously injured, the pilots were hospitalized. Two men in a car on the highway that was struck by the plane were severely injured. The NTSB said the balance of the plane was off with too much weight near the front of the plane. An NTSB simulation determined that the plane could not get off the ground at normal speeds with the weight distributed as it was. The agency has not completed its final report on the accident. A new set of weight and balance guides will take effect in August. While much of the attention has been focused on how the new guidelines will impact turboprop aircraft, the rules will apply to all planes carrying up to 70 passengers.
  • Great Lakes Aviation [GLUX] has appointed Michael O. Matthews as the carrier's new chief financial officer. Matthews joined the carrier last November as the vice president of finance. With Matthews' appointment, Michael L. Tuinstra will step back into his role as the company's treasurer. He had served as the interim CFO. Matthews previously was the treasurer of Budget Group.
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