Citing exceptionally poor market conditions, Irish airline Aer Lingus said on Friday it was cutting back trans-Atlantic flights on its winter season later this year.
The former state airline said in April that total revenues fell by 16 percent year-on-year in the first three months of this year and warned it was facing an exceptionally tough trading environment.
“Aer Lingus’ yields have been declining in exceptionally poor market conditions,” a statement from the carrier said. “Most notably, long haul average fares fell by 19 percent in the first quarter of 2009 reflecting weak economic conditions and consumer confidence on both sides of the Atlantic.
“As a first step in right-sizing the business, Aer Lingus will be reducing seat capacity on winter long haul services — by approximately 25 percent as compared to 2008,” it said.
Aer Lingus chairman Colm Barrington said the airline was going through its most difficult period in its 73-year history.
“We are looking at the whole operation of Aer Lingus and we are starting off with the winter schedule,” he said.
He said services between Dublin and Washington and San Francisco would be suspended.
Flights between Chicago and Shannon airport in western Ireland will also be suspended.
The moves come as the International Air Transport Association nearly doubled its forecast for global airline industry losses this year to US$9 billion reflecting a “rapidly deteriorating revenue environment” because of the worldwide economic downturn.
CESSNA
Separately, embattled US corporate jet builder Cessna Aircraft said on Friday it plans to cut an additional 1,300 jobs to adjust production to match a meltdown in orders amid the global economic downturn.
The new job cuts will bring the total number of payrolls eliminated since November to 8,200, about half the prior workforce, said the company, a wholly owned subsidiary of Textron Inc.
“We had previously reduced the workforce by 6,900 since November, until April 29. This will be 1,300 on top of that,” Cessna spokesman Doug Oliver said.
Oliver said the jobs were based “solely” on a reduction in aircraft production.
“We are delivering fewer aircraft than we originally planned,” he said.
A year ago the company had projected 535 aircraft deliveries this year, a number that has since been revised to between 270 and 300 “because of the economic crisis,” he said.
Oliver said 800 employees would receive pink slips over the next two weeks, with the remainder notified in August.
As part of the restructuring, the Wichita, Kansas-based company will close a plant in Bend, Oregon.
US AIRWAYS
Meanwhile, US Airways Group Inc is asking 400 flight attendants to take up to 16 months off in response to overstaffing.
The Tempe, Arizona-based company is seeking 300 volunteers from its hubs in Phoenix and Las Vegas and 100 volunteers based on the east coast.
US Airways spokeswoman Valerie Wunder said on Friday that the airline has cut flights faster than flight attendants have left through normal attrition.
Wunder says the airline would turn to involuntary furloughs if it doesn’t get enough volunteers.
Airline president Scott Kirby said at an industry conference on Thursday that the company’s current decline in passenger revenue is even worse than the decline that followed the terrorist attacks of Sept. 11, 2001.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
RSS