Boeing to increase 737 production rate in 2017

By BA Staff

Courtesy of Wikipedia

Boeing announced that production on the 737 program will increase to 47 airplanes per month in 2017, the highest rate ever for the best-selling airliner in history.

Once implemented, the 737 program will build more than 560 airplanes per year, and will have increased output by nearly 50 percent since 2010.

Beverly Wyse, vice president and general manager, 737 Program, Boeing Commercial Airplanes said:

"We're taking this step to make sure our airplanes get into the hands of our customers when they need them. Our employees and our suppliers have successfully increased the production rate to unmatched levels over the last three years. This increase will lay a solid foundation as we bridge into production on the 737 MAX."

Boeing currently produces 38 airplanes per month from its Renton, Wash., factory and will increase the rate to 42 per month in the first half of 2014. First delivery of the 737 MAX is on track for third quarter of 2017.

The rate increase announced is not expected to have a significant impact on 2013 financial results.

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Alaska Air group reports record third quarter fiscal 2013 results

By BA Staff

Alaska Air Group, Inc., reported third quarter 2013 GAAP net income of $289 million, or $4.08 per diluted share, compared to $163 million, or $2.27 per diluted share in the third quarter of 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $20 million ($12 million after tax, or $0.17 per diluted share), and a one-time special revenue item of $192 million ($120 million after tax, or $1.70 per diluted share) that primarily resulted from the application of new accounting rules associated with the modified affinity card agreement, the company reported record adjusted net income of $157 million, or $2.21 per diluted share, compared to adjusted net income of $150 million, or $2.09 per diluted share, in 2012.

Alaska Air Group CEO Brad Tilden said:

"These results represent our best quarter ever and mark Alaska's 18th consecutive quarterly profit. This is noteworthy given significant additional competition in some of our core markets. The balance and strength of our network combined with the ability of our people to respond quickly to changing business conditions are enabling us to succeed in this highly competitive industry."

The following table reconciles the company's reported GAAP net income and earnings per diluted share (EPS) during the third quarters of 2013 and 2012 to adjusted amounts:

	Three Months Ended September 30,
(in millions, except per share amounts)	Dollars	Diluted EPS	Dollars	Diluted EPS
Reported GAAP net income	$289	$4.08	$163	$2.27
Mark-to-market fuel-hedge adjustments, net of tax	-12	-0.17	-13	-0.18
Special revenue item, net of tax	-120	-1.7	----	----
Non-GAAP adjusted income and per-share amounts	$157	$2.21	$150	$2.09

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Virgin America Reports August Traffic

By BA Staff

Image Credit: Virgin America

San Francisco-based Virgin America reported its preliminary operational results for August and August year-to-date. Virgin America’s August 2013 traffic (revenue passenger miles) decreased 5.1 percent on capacity (measured in available seat miles) that was 5 percent lower than in August 2012.

Load factor was 82.2 percent, which is unchanged from the same month a year prior. The number of onboard passengers fell 1.9 percent compared with August 2012. Virgin America estimates August 2013 passenger revenue per available seat mile (PRASM) to have increased by between 8 and 9 percent, compared with the same month in 2012.

	August				August Year to Date
	2013	2012	Change		2013	2012	Change
Revenue Passenger Miles (000)	913,612	962,133	5.1%		6,666,197	6,712,749	0.7%
Available Seat Miles (000)	1,110,443	1,168,567	5.0%		8,206,745	8,363,432	1.9%
Passenger Load Factor	82.2%	82.3%	0.1		81.2%	80.3%	1.0
Onboard Passengers (000)	590	601	1.9%		4,259	4,202	1.4%

Virgin America also announced the resumption of its seasonal flights between New York JFK and Palm Springs, which are offered every Saturday as the only nonstop flight between the New York City area and Palm Springs. 

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IndiGo modifies its seat pricing after ministry rap

by Devesh Agarwal

Photo copyright Devesh Agarwal. All rights reserved.

A chastened IndiGo airline, hurried modified portions of its much annoying seat pricing policy after facing the irritation of passengers and the rap of the civil aviation ministry.

A late night statement from the airline says

The feedback of our flyers is of utmost importance to us and as a result, with immediate effect, IndiGo will not charge for pre-booking of any of its middle seats (except for rows 1, 12 and 13)

About 11 days ago, the airline had announced a new seat pricing formula called IndiGo Seat Plus, after the aviation ministry had indicated their acceptance of un-bundling of additional services like baggage, food, seat pre-selection, etc, which helps drive ancillary revenue, a major income source for airlines.

Under IndiGo Seat Plus, passengers could pre-block seats for a premium. Rs 500 for sitting in Rows 1, 2, 12 and 13 on domestic flights and Rs 800 for international. For all other window and aisle seats the premium was Rs 200 and Rs. 300 for domestic and international flights respectively. However, what got the goat of almost everyone was IndiGo's Rs. 100 and Rs. 200 charge for booking of even the most unwanted seat in the aircraft, the middle seat.

Earlier today, reports indicated The Ministry of Civil Aviation has directed domestic airlines to limit the number of seats on their flights for which they charge passengers a fee which is over and above the cost of the ticket. Since IndiGo was the only airline charging for seats, quiet clearly it was in the cross-hairs of the officials.

Indian carriers would be well advised to take heed of the developments in the North American market, where airlines nickel and dime their passengers every step of the way. Last year, US airlines earned in excess of $6 billion (about Rs. 33,000 crores) in change fees alone. Change fees are normally charged for changing ticketed schedules.

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