unaligned

EasyJet has taken a GBP40m (US$52.5m) currency hit because of the devaluation of the pound since the UK voted to leave the EU June 23. EasyJet warned the economic and operating environment is “difficult and uncertain” as it enters its final quarter. “The most tangible effect [of Brexit] has been the devaluation of the pound both against the dollar and euro,” EasyJet CE Carolyn McCall said. “The swing from June 23 against us on our unhedged [currency] is GBP40m. That’s just since June—in the last 4 weeks—so that’s quite significant.” EasyJet added that it is “mobilised and actively engaging with regulators” over European flying rights. If the UK does not remain in the deregulated European aviation market, EasyJet’s contingency plan to obtain an EU air operator’s certificate is “well-developed.” <br/>

Southwest Airlines' Q2 profit rose 35% as fuel costs fell and the airline flew fuller planes. The carrier's net income increased to US$820m in Q2 ended June 30, from USD$608m a year earlier. Total operating revenue rose 5.3% to $5.38b. Southwest said it expected RASM to fall 3-4% in the quarter ending September. "While solid traffic demand has continued into July thus far, the fare environment remains challenging," CE Gary Kelly said. Southwest's total expenses rose 2% to USD$4.11b in Q2. However, unit cost fell 2.6%, helped by lower fuel costs. Cheap oil has also forced Southwest, the largest hedger among US airlines, to pay hefty sums to counter-parties in hedge contracts that it acquired for protection in case of a rise in energy prices. As a result, the carrier will not reap the full benefit of cheaper fuel. <br/>

Southwest Airlines customers struggled for a second day as the carrier worked to recover from a technology failure that grounded some planes and prevented travellers from checking in for flights. The carrier canceled 335 of its 3,900 daily flights Thursday after dropping 700 from its Wednesday schedule following the mid-afternoon crash of its network. The “vast majority” of operating systems were running by early Thursday, CE Gary Kelly said. The disruption occurred when an unspecified piece of equipment failed and a backup system also malfunctioned, Kelly said. The carrier has been working to replace much of its “old technology” that may have caused the problem, which didn’t appear to be related to a system crash that occurred in October, he said. <br/>

Allegiant Air said a FAA audit of its operations, training, maintenance and compliance with regulations turned up “minor” or “non-systemic” issues, the carrier said Thursday. Allegiant Air released the FAA’s July 18 summary of its findings from a 3-month evaluation, which concluded June 30. An FAA spokesman said the evaluation, which every airline must undergo every 5 years, uncovered “a number” of deficiencies. “None were systemic regulatory problems, which are the most serious category of deficiencies identified in these types of reviews.” He said the FAA will “closely monitor” the effectiveness of Allegiant’s mitigations, which are due by Sept 30. The FAA has determined that the findings don't warrant enforcement action at this time. <br/>

Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported Q2 net income of US$260m, up 11.1% over a net profit of $234m in the prior-year period. Alaska’s Q2 revenue rose 4% year-over-year to $1.49b. Like much of the US airline industry, however, it saw its unit revenue, as measured in PRASM, decline. Mainline Q2 PRASM decreased 7.5% year-over-year to 10.49 cents. The company’s June quarter expenses grew 1% year-over-year to $1.08b and operating income was $418m, up 12% over an operating profit of $372m in the 2015 Q2. Alaska saved $60m on aircraft fuel in the quarter compared to the prior-year period, but did incur $14m in costs related to its proposed acquisition of Virgin America. Alaska Airlines’ mainline traffic increased 10.4% year-over-year in Q2 to 8.45b RPMs. <br/>

Alaska Air Group has reached an agreement with the US Department of Justice on the timing of the antitrust review of its proposed acquisition of Virgin America and expects the merger to close in the 2016 Q4, according to Alaska CE Brad Tilden. Tilden expressed confidence that the US$4b deal to merge Alaska Airlines and Virgin America will be finalised in Q4, allowing integration activities to begin. “The integration management office is up and running,” he said. Virgin America will become a subsidiary of Alaska Air Group until Alaska Airlines and Virgin America receive a single operating certificate from FAA, which Alaska executives expect to happen by early 2018. Tilden said the Alaska Airlines brand will definitely remain post-merger, but no decision has been made on the future of the Virgin America brand. <br/>

Fastjet said it would raise up to GBP19.2m through a share issue. The carrier said it would issue the shares at 50 pence each, a premium of 116% to the stock's Wednesday close. Fastjet shares jumped nearly 57% to 35.9 pence at 1245 London time Thursday on the London Stock Exchange. The airline also said its new CE Nico Bezuidenhout would start a business review when he joins the carrier in August. Ed Winter stepped down as Fastjet's CE in March, under pressure from the company's second-largest shareholder, Stelios Haji-Ioannou. Haji-Ioannou has also called for the dismissal of Fastjet chairman Colin Child. The carrier, which is facing tough conditions in its home market of Tanzania, said it intended to break even on cash flow by the end of 2017. Fastjet expects to report a trading loss for 2016. <br/>

WestJet says it is confident of the success of its Gatwick route despite problems with the reliability of its B767-300ER aircraft on the route. The B767s the carrier uses on the route are on average over 20 years old and previously were operated by Qantas. The airline’s trans-Atlantic service has struggled in its early months with punctuality and reliability as a result of problems in quickly locating replacement parts according to the CE Gregg Saretsky. Nevertheless, Saretsky said Wednesday the Gatwick route would be profitable. “We’re actually ahead of where we expected to be. The flights have been very, very well subscribed,” he said, and added that. “We haven’t had a single flight cancellation in the month of July. We’ve had 19 days of perfect operation with great on-time performance. I think those early day hiccups are behind us”. <br/>

Jazeera Airways has been granted approval by the emirate’s govt for the necessary land on which to build a dedicated terminal at Kuwait International. The main airport is operating beyond its design capacity and Jazeera hopes that having its own terminal, together with a soon-to-be-opened business lounge and remote check-in, will draw more passengers seeking a more pleasant passage through the airport. The approval for a parcel of land beside the existing terminal has now been granted by the country’s Council of Ministers. The airline’s investment in the new building is put at KD14m (US$46m). This represents an increase in the previously announced figure of “around KD10m” given when the project was announced in May 2015. Construction time for the new terminal is 15 months. <br/>