American Airlines Group is cutting ties with 2 regional affiliates as it seeks to simplify its short-distance operations. The carrier won’t renew contracts with ExpressJet and Trans States when they expire in 2019, according to a memo to reservations agents. Their flights will be shifted to other airlines and shouldn’t affect customers, the memo said. The move furthers American’s plan to streamline operations and create what the memo called a “seamless experience” for passengers on the mainline carrier and American Eagle, the brand used for flights by regional partners. Dropping ExpressJet and Trans States will pare the number of American’s such carriers to 7. The company had 10 regional partners at the start of the year and ended its contract with Air Wisconsin Airlines in February. <br/>
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Two Qantas flights had a near miss in Perth when one crossed a runway into the path of another jet that was commencing take-off. The Australian Transport Safety Bureau is investigating the serious incident, which occurred Saturday after a Qantas flight from Sydney landed and nearly cut across a departing plane. The pilot of the arriving aircraft had to brake hard as the other jet, travelling to Sydney, was forced to abort take-off. An initial report from the ATSB said the aircraft that landed was supposed to stop short at a holding point before the runway but the pilots kept going until air traffic controllers told them to brake immediately. The close shave occurred in an area known as a runway incursion “hotspot”, the ATSB said. <br/>
The head of IAG warned manufacturers over delays to plane deliveries and engine issues Friday, saying they needed to consider its compensation demands. IAG has had to rejig schedules to mitigate delays to A320neo planes built by Airbus and because of a Rolls-Royce engine issue on Boeing 787 Dreamliners. Some compensation clauses are built into contracts but IAG CE Willie Walsh said that wasn't enough. "In some cases we're going beyond what's in the contract, and we expect suppliers to respond to our demands. They have to factor in the ongoing relationship they have with us," Walsh told analysts. He said IAG was in talks with both Airbus and Boeing over new widebody orders but that Boeing was being "particularly constructive" of late. <br/>
IAG posted a significantly higher operating profit in Q1 and assured investors its full-year result will be better than last year despite rising fuel prices. The consolidated airline group earned a E280m (US$345m) operating profit in the March quarter, up E120m over the prior-year quarter. On a group level, IAG reached a 6.9% operating margin. British Airways continued to be the most profitable unit, with a 9.9% operating margin, followed by Iberia (1%). Aer Lingus reported a small operating loss for the quarter, but improved its margin by 1 point to -0.5%. Vueling, which has a more seasonal business than the other IAG carriers, reported a negative 7.8% operating margin, 3.3 points better than in Q3 2017. IAG increased Q1 capacity by 4.1% YOY as demand grew by 6.1%. <br/>
The future of supercheap trans-Atlantic airfares is hanging in the balance as Norwegian Air and IAG spar over a possible deal. IAG has time on its side. CE Willie Walsh said Friday the company was “considering all its options” for the 4.6% stake in Norwegian it announced last month. Having made 2 unsuccessful bids for the company, Walsh repeatedly emphasised the word “all” in a call Friday with investors, as if to suggest IAG might just walk away. Asked whether Norwegian’s growth plan was sustainable, he flatly said “no.” The target responded asserting that both IAG’s bids “undervalued Norwegian Air Shuttle and its prospects.” Walsh may have time on its side. Norwegian’s Q1 results were poor, and it is less hedged than peers against rising fuel prices. <br/>