Major runway closing at JFK airport

Starting Monday March 2 nd, the main runway at New York’s JFK is shutting down for repairs for four months. That means more air travel delays, which could spread throughout the U.S. Associated Press reports that airlines aren’t going to add more flights in April and May like they normally do when travel picks up. JetBlue, Delta and American are all holding their winter schedules for JFK until July. For JetBlue, the biggest carrier at the airport, that means an average of 150 departures compared with a normal summer schedule of 180.

CNN reports the same story and points out that JFK’s busiest runway will close for four months for reconstruction.

The $376 million project for Runway 13-31, also known as the Bay Runway, will widen it from 150 to 200 feet and add taxiways, all in an effort to ease traffic congestion at the airport .. full article

JetBlue Resumes Flights

U.S. carrier JetBlue Airways (JBLU.O) said on Friday that its flights would resume after it earlier voluntarily issued a systemwide temporary halt to operations because of an information-technology issue. Flights were to restart by 3:45 p.m. Eastern time. They were halted about an hour earlier. A spokeswoman said JetBlue was operating on a lighter schedule on Friday because it had canceled about 80 flights due to snowy weather in the New York area. She said the carrier operates an average of about 600 daily flights.

Boeing delays 787 Dreamliners, United orders until March

Boeing Co. said it won’t have four 787 Dreamliners in the air until March, rather than February as planned, because it’s still finishing some work and adding extra test equipment.
Businesweek.com reports that Boeing is taking extra time before the 787 gets in the air.
“We’re taking some extra time to get in the air but we will be able to fly more often sooner in its flight-test schedule, which will be an overall benefit to the program,” spokeswoman Lori Gunter said of the third test jet, which will be the fourth to fly. “This is considered a typical adjustment to the flight test program and a smart move overall… full article

Meanwhile, AIN online reports that United Airlines has finalized a firm order for 25 Boeing 787-8 jetliners, the Chicago-based carrier announced today. Valued at $4.2 billion at list prices, the deal includes so-called purchase rights for another 50 Dreamliners.

United said it plans to take delivery of the 787s at the same time it begins to retire its Boeing 747s and 767s, between 2016 and 2019.

Air New Zealand to Offer Beds In Economy Class

Major ground breaking introductions rarely occur in the airline world – at least not fro economy passengers. Other than new models of aircraft, passengers are used to major changes to their travel experience. If anything, airport security and penalties have resulted in a poorer experience. Air new Zealand may be changing that with the recent introduction of the ‘cuddle seat’.

The Cranky Flier was there to witness it … heres what he thinks….

t had been hinted about around the local media here in New Zealand for the last few days, but now its official. If you fly incoach on Air New Zealand, you’ll be able to lie down, well, some of you will. I was at the big reveal of the new interior yesterday, and I liked what I saw.

All three cabins are getting a makeover, though the business cabin is a much more minor change than the rest. The process has taken them more than 3 years, and they hired famed design firm IDEO to work with them along with several local structural design firms. (Read more about the process on BNET.) The result is what CEO Rob Fyfe required – a new, superior product that takes up no more space than the old product and costs the traveler the same amount for a seat. They’ve done just that in coach……. more

Tiger Airways raises $178 million from popular IPO

Finance Asia.com reports that Tiger Airways raises $178 million from popular IPO.

The Year of the Tiger may not officially start until February 14, but for people involved in Singapore’s first listing this year, this may well feel like the Month of the Tiger — worthy of at least a small roar.

The reason for that would be the strong support for budget airline Tiger Airways Holdings’ initial public offering, which took quite a few market watchers by surprise, coming as it did at a time when the economic environment has pushed a large and well-established airline like Japan Airlines to the brink of bankruptcy. Under such circumstances, Tiger’s short track record and aggressive expansion plan could make even the coolest of investors fasten their seatbelts and worry about air pockets ahead.

But the investor actions speak a different language. In fact, the institutional portion of the deal, which accounted for more than 90%, was four times covered and attracted more than 70 accounts, while retail investors subscribed for 21.3 times as many shares as had been earmarked for them.

The orders included some price sensitivity, however, and taking into account the views of some key institutional investors, the company agreed to fix the price at S$1.50 — the mid-point of the S$1.35 to S$1.65 offering range. This allowed it to raise S$247.7 million ($178 million) which will be used as part payment for 50 new aircraft that will be delivered between 2011 and 2015, as well as for repayment of all outstanding short-term loans and the establishment of new hubs in addition to its three current bases in Singapore, Melbourne and Adelaide.

In a release announcing the outcome of the IPO, Tiger Airways’ president and CEO, Tony Davis, said he was “absolutely delighted” with the response from both retail investors in Singapore and major global investors and he took it as “strong vote of confidence in our low-cost business model and the growth potential of the airline”.

The low-cost airline, which before the IPO was 49%-owned by Singapore Airlines, sold 30% of its enlarged share capital in the form of 165.155 million shares, of which 95% were new. There is also a 12% greenshoe that could add another 19.8 million shares to the deal and increase the total proceeds to as much as $200 million.

The allocations were said to have been heavily skewed towards long only investors and the higher quality participants, with more than 75% of the deal allocated to the top 20 investors. Three-quarters of those 20 investors were long-only accounts.

The final price values the company at about 12.6 times its projected earnings for the fiscal year ending in March 2011. This puts it at a significant discount to Ryanair, which trades as of yesterday at a P/E multiple of 15.8 times, based on projections for the fiscal year to March 2011. Given Ryanair’s lower operating history and track record, this makes sense.

However, Tiger Airways is coming to market at a premium to AirAsia, which according to the Bloomberg consensus forecasts trades at only 6.8 times projected 2010 earnings. Analysts who are part of the Tiger Airways syndicate have a more conservative earnings forecast for the Malaysia-based carrier, and put the company at a 2010 P/E multiple closer to 10-11 times — still implying a premium for Tiger Airways, however.

Investors no doubt took some comfort in the fact that the company is backed by top quality companies and investors. Aside from Singapore Airlines, the company’s four founding shareholders include Indigo, a US-based private equity firm that specialises in the transportation sector; Temasek through its wholly-owned subsidiary Dhalia; and Ryanasia, which is a company controlled by Ryanair founder Decclan Ryan.

Indigo was the seller of the 5% portion of existing shares in the main deal, but will remain a substantial shareholder, and Ryanasia is putting up the existing shares for the 12% greenshoe, should it be exercised.

Citi and Morgan Stanley were joint bookrunners for the IPO, with DBS acting as a joint lead manager and coordinator for the Singapore retail offering. The shares will start trading in Singapore on January 22.

Asia’s biggest carrier, could fall into bankruptcy within days in the latest sign the bad times are far from over for the aviation industry.

The Times reports that the company, burdened with debts of $16 billion (£10 billion), is expected to file for protection in a state-led rescue. This will allow it to pursue a restructuring through the courts.

The EITC, the state group leading the rescue effort, could put the plan into action as early as January 19, according to reports in the Japanese media. It could lead to the loss of up to 13,000 jobs, which is about a third of the airline’s workforce.

The carrier’s struggles reflect the wider issues affecting the industry. JAL is one of the biggest airlines in the world, flying 55m passengers a year in 35 countries. It has a huge cost base and since 2001 has been bailed out by the government on four occasions.

Like other airlines, it is still nursing wounds from the industry’s low of 2008, which Iata, the trade body, said was the “worst environment for 50 years”.

Scores of carriers in America, Europe and Asia collapsed as fuel prices rose and passenger numbers plummeted because of the recession. Last year saw some improvement in traffic, but the price of jet fuel, the single biggest cost for carriers, remained twice what it was five years ago full article

Boeing reviews viability of short-haul 787

According to Reuters, Boeing is reviewing the planned production of the short haul 787.

Following months of speculation Jetstar and Air Asia have joined forces. Singapore media report as follows:AUSTRALIAN low-cost carrier Jetstar and Malaysia’s AirAsia have agreed to pool resources and expertise in a drive to slash costs and lower ticket prices.At a press conference in Sydney yesterday, AirAsia and Qantas-controlled Jetstar disclosed that they had inked a deal that would mean cooperating across a number of areas, including aircraft purchasing and ground-handling.The alliance of the two low-cost carriers, which involves no exchange of cash or equity, could also lead to the pooling of aircraft components and spare parts plus reciprocal arrangements for switching passengers to alternative flights should their service be disrupted.The deal, finalised by Qantas’ chief executive officer Alan Joyce and the chiefs of the two carriers, Jetstar’s Bruce Buchanan and AirAsia’s Tony Fernandes, is expected to shave as much as US$183 million (S$255 million) a year from the two airlines’ combined annual running costs.Mr Buchanan said that this should translate into lower fares for travellers.’We are focused very much today on operational synergies. Cost-saving ideas are really critical to our business model. They obviously allow us to pass on more low fares, allow both businesses to make air travel more affordable and allow more people to travel more often for less. … full article