Paul Lewis/WASHINGTON DC
National Airlines expects to return to profitability by the end of this month, just four months after seeking Chapter 11 bankruptcy protection, from which it hopes to emerge within the year. The Las Vegas-based full-service carrier is already planning to add capacity and new routes.
National has debts in excess of $100 million and is still negotiating to reschedule payments to its principal creditors, including lessors Ansett Worldwide, Boullioun, International Lease Finance, Pembroke, Pegasus and Sunrock, plus manufacturers Boeing and Rolls-Royce. It hopes to agree lower lease rates in exchange for longer-term commitments than those of five to seven years in place.
Chief executive Michael Conway stresses that National has so far not resorted to "quick dip financing" and that "talks with creditors, lessors and critical vendors are progressing quite well". He is also upbeat about the improvement in the carrier's performance. "I would expect to finish March with a 70% load factor or better, which is about eight points higher than last year. Our bookings are at record levels," he says.
National plans to add a used Boeing 757-200 to its fleet of 15 Rolls-Royce 211-535E4-powered aircraft in April, plus two more in the second half, allowing it to launch services to Seattle and Atlanta.
Prior to filing for Chapter 11, National had planned to take six 757s this year, including four new aircraft from General Electric Capital, and Conway forecast last May that it would be operating 40 by 2003. He now says the airline has "had to slow down growth a little bit", given current fuel prices and worries over the US economy.
National traces its financial difficulties to last September, when the start of Las Vegas' off-peak season coincided with a sharp fuel-price rise. Conway says he may hedge against future increases.
Source: Flight International
