Kevin O'Toole/LONDON
Further evidence has emerged of an upturn in fortunes for the beleagured US low-cost carriers, with a round of profits for the second quarter.
Vanguard Airlines has posted its first-ever profits and Kiwi International Airlines is optimistic that it will return to the black this year.
AirTran Airlines, formerly ValuJet, kicked off the better news with its first quarterly profits since the Florida crash in May 1996 sent the whole sector into a tailspin.
Vanguard has followed with a relatively modest net profit of $323,000 for the June quarter, although that still left the carrier with a loss of over $4 million for the first half of the year. The result marks Vanguard's first profitable quarter since it started flying in late 1994 and it expects to stay in profit for the September quarter.
Rocky Spane, the president brought in to engineer the airline's recovery, says Vanguard is in talks about upgrading its fleet of nine Boeing 737-200sover the "next few years" by buying or leasing and is studying "various options" for raising new capital.
Vanguard, which now serves eight US cities, is eyeing niche markets not served by its large rival Southwest Airlines, including a new drive to target smaller business customers.
Kiwi, which was forced into bankruptcy amid the fall-out of the ValuJet crash and re-emerged only last year, is also anticipating a return to profits in the July/August period on the back of a consistent operational improvement over the year so far.
Kiwi does not disclose its financial results, but second quarter operating figures show that the carrier's performance continues to improve. "I think we are surprising many people by showing improvement for two consecutive quarters," says president and chief executive Jerry Murphy.
Traffic to Puerto Rico is strong, adds Murphy, and expansion in the Newark-Chicago market has allowed Kiwi to capture more high-yield business travellers. In the June quarter, load factors climbed back towards 60% as traffic edged up despite a slashing of aircraft capacity.
When the airline emerged from Chapter 11 last year, it did so with only half of its original fleet of 15 leased Boeing 727s and with seven destinations. A seventh aircraft is to rejoin the fleet soon, but a switch to McDonnell Douglas DC-9s is still planned as 727 leases expire.
There may also be options for charter operations following a merger between Aviation Industries, one of the backers of Kiwi's re-emergence from bankruptcy, with Integrated Marketing Professionals (IMP), which provides travel packages to the gambling casinos on the Mississippi coast. IMP, formerly known as Casino Airlink, now offers casino vacations from five US cities.
The Amtran group also saw its fast-expanding American Trans Air (ATA) low-cost scheduled operations get back on track in the second quarter after last year's drive to step up efficiency. The ATA scheduled services have taken over from the traditional charter operations as Amtran's main source of revenue.
Overall, the group ended the second quarter with net profits of nearly $14 million, against a small net loss a year ago.
Source: Flight International
