In a move widely expected to portend an industry trend in years to come, Continental Airlines last month confirmed its intention to sell 20 percent of its now wholly owned Continental Express subsidiary on September 1, laying the foundation for an eventual full spin-off of the Houston-based regional airline.
Economy of the United States
Mesa Air Group last month reversed its decision to establish a new Cincinnati base and canceled all the flights scheduled to six cities from Cincinnati/Northern Kentucky International Airport for July 8. Mesa contacted all affected passengers and reaccommodated them on Delta Air Lines or Comair flights.
In the fallout from the failed merger of General Electric and Honeywell, Honeywell’s board of directors last month huddled to contemplate whether the company has a legal case against GE for failing to use “reasonable best efforts” to win approval for the proposed deal in Europe.
“There are definite signs the market is improving. We’re starting to see aircraft sales pick up at the broker level and we’re holding our own in the market, at least in the first quarter of this year, and we’re hoping it will continue in the second quarter,” James Donlan told AIN.
Airline executives whose predictions of regional divestitures raised eyebrows just two years ago watched their prophesies turn to hard reality in late February, as Northwest Airlines announced its intention to spin off its Memphis-based Express Airlines I subsidiary and Continental Airlines revisited its plans to divest itself from Continental Express.
American Airlines has responded to a contractual limit on ASM growth at its regional affiliates with a plan to strip the AA* code from certain St. Louis-based flights operated by American Connection partners Chautauqua, Trans States and Corporate Airlines. American claims the move will give it another six to nine months to decide the fate of its San Juan, Puerto Rico-based Executive Airlines subsidiary.
Less than nine months into a pro-rate code-share contract with Frontier Airlines that called for the introduction of seven Bombardier CRJs into the Frontier system by year-end, Mesa Air Group has begun to curtail its relationship with the Denver-based low-fare carrier as a lingering environment of razor-thin yields has resulted in “less than satisfactory” returns for Mesa, according to a company official.
A pair of long-awaited pilot contracts finally reached the ratification stage when Appleton, Wis.-based United Express affiliate Air Wisconsin and Alaska Airlines subsidiary Horizon Air each closed collective-bargaining negotiations with their respective pilot unions.
Sagging operational and financial fortunes at Cheyenne, Wyo.-based Great Lakes Aviation have prompted Tennenbaum & Co. to withdraw its offer to buy the former United Express affiliate’s outstanding shares of common stock for $4 a share. In a letter to Great Lakes’ board, Tennenbaum suggested a merger of the Frontier Airlines code-share partner with another turboprop operation to increase its attractiveness to potential investors.
A recent top executive appointment at Textron signifies more than just a leadership change. It was also part of a continued reorganization of the company’s corporate structure that started about a year ago and will affect its operating units, including Cessna Aircraft and Bell Helicopter.