Aviation and Aerospace

2006-10-30T09:47:00.000-08:00

Airbus said Monday that a visit by Emirates Airlines to check on A380 production plants is simply a follow-up on a promise of transparency to customers of the superjumbo made by former CEO Christian Streiff.

The European planemaker said it was not aware that Dubai's Emirates Airlines, the biggest customer of the A380, was canceling an order for 10 A340-600 jetliners, as reported Sunday on The Wall Street Journal Web site.

As to the visit to Toulouse by auditors to assess the planemaker's progress on building its A380 superjumbo -- now two years behind schedule -- Airbus was apparently unperturbed.

It's "something agreed to at the time of Christian Streiff," said spokesman Justin Dubon. "He promised customers that they would be kept up to date ... and briefed on the progress of the A380."

The plan for updates was on a monthly basis, Dubon said, and "it's up to customers to come and see and investigate how they'd like to."

Streiff was replaced on Oct. 9 by Louis Gallois, the fourth Airbus CEO in 16 months.

The Wall Street Journal report quoted Emirates President Tim Clark as saying his airline will not take the Airbus A340-600 jetliners it had ordered and is sending auditors to assess the European plane maker's progress on the A380 superjumbo program.

Emirates will instead order 777 models from Boeing Co., Emirates Executive Vice Chairman Maurice Flanagan said, the Journal reported.

The switch -- which follows Clark's complaints last year about the high operating cost of the A340 family of planes -- shows how Boeing is benefiting from troubles at Airbus, a unit of Franco-German European Aeronautic Defence & Space Co., the paper said.

The Emirates order for 10 A340-600 jetliners had a catalog value of $2.25 billion (euro1.8 billion), according to the newspaper.

Clark also said Emirates will send engineers to check on in France and Germany. The engineers will examine how Airbus managers are resolving industrial problems that have pushed production of the world's largest passenger plane two years behind schedule and more than one-third over its original $12 billion (euro9.5 billion) budget, the paper said.

Emirates has ordered 43 superjumbos from Airbus and a further two from a leasing company. Airbus has taken a total of 167 firm orders for the A380, including an eight-plane order from Australia's Qantas announced Sunday.

2006-10-18T14:28:00.000-07:00

American Airlines' Parent Reports $15M Profit in 3Q As Rising Revenue Offset Higher Fuel Costs

The parent of American Airlines, the nation's biggest carrier, reported a slim profit for the third quarter as rising revenue offset higher fuel costs.

It was the company's first back-to-back quarterly profit in six years, and shares of AMR Corp. jumped 7.5 percent.

Analysts expect several other leading U.S. carriers to soon report their second straight profitable quarter, and they say the recent dip in fuel prices could lift airline profits the rest of the year.

But airline executives, including the leader of American, said it was far too early for the carriers to declare victory after a long slump that has seen them lose more than $50 billion.

AMR said Wednesday it earned $15 million, or 6 cents per share, in the quarter ended Sept. 30, compared to a loss of $153 million, or 93 cents per share, a year earlier.

Revenue rose 6.6 percent to $5.85 billion from $5.5 billion a year ago.

The results included a $99 million charge to reduce the value of fuel-hedging contracts. Without that write-down, AMR said it would have earned $114 million, or 45 cents per share.

Analysts expected the company to earn 42 cents per share before one-time items on sales of $5.90 billion, according to a survey by Thomson Financial.

AMR shares rose $1.80, or 7.5 percent, to close at $25.90 on the New York Stock Exchange.

AMR, which also owns the American Eagle regional airline, said it paid $1.77 billion for fuel, $189 million or 11.9 percent more than a year ago. But a recent dip in prices led AMR Wednesday to cut $528 million from its July forecast of fuel spending for the second half of 2006.

Fort Worth-based AMR was also helped by strong demand for travel, which has allowed carriers to raise fares. American flights ran 81.7 percent full on average, up from 81.2 percent a year ago.

The results would have been better without an August terror scare. American estimated it lost $50 million in revenue after British authorities said they broke up a plot to bomb trans-Atlantic flights.

Chairman and Chief Executive Gerard Arpey said the results show progress in the face of new challenges.

American was the first major U.S. airline to report third-quarter results, and analysts expect the industry to post back-to-back profitable quarters for the first time since 2000. But Arpey said AMR and its rivals still face hard work to recover from a long and deep slump.

"The industry is a long way from turning any corners," Arpey said. "The industry has lost $50 billion since the year 2000, and taken on billions and billions of dollars of debt. In a very, very strong U.S. and international economy, it's producing very modest pretax (profit) margins."

The comments echoed those of Gary Kelly, chief executive of Southwest Airlines Co., the most profitable U.S. carrier. He worried that the recent drop in fuel prices could be temporary and that travel demand has softened since summer.

"The airline balance sheets are in terrible shape," Kelly said. "The earnings are nowhere near where they need to be to compensate investors."

Southwest and Continental Airlines Inc. are scheduled to report their third-quarter results on Thursday.

Ray Neidl, an analyst with Calyon Securities, said he expected slightly better results from AMR, but that when considering the London scare, "They did fairly well."

Neidl said American will face growing pressure to control costs and sell a better mix of fares -- more seats at higher fares; fewer at deep discounts -- to boost revenue. Airlines are now in the typically slow fall period, but Neidl said American should be able to raise prices again next spring.

"If the economy remains strong next year and if fuel moderately declines, it could make 2007 a banner year," he said.

Besides uncertainty about the economy and fuel prices, American faces other problems. It is burdened with $19 billion in debt -- the chief financial officer said AMR could sell investments to pay down debt.

And American faces brand-new competition in Texas from Southwest. Under a new law, Southwest can sell one-stop tickets from Dallas Love Field to anywhere in the country, competing with American flights at nearby Dallas-Fort Worth International Airport.

Arpey said Southwest's service -- previously barred by a 1979 federal law that applied only to Love Field -- "will undoubtedly put pressure on our revenues." He didn't offer any numbers.

For the first nine months of the year, AMR earned $214 million, or 91 cents per share, compared to a loss of $257 million, or $1.58 a share, in the same period of 2005. Revenue is up 10.4 percent so far this year, to $17.17 billion.

2006-10-16T21:05:00.000-07:00

The airline industry's recent renaissance may have hit a speed bump in the third quarter, as carriers absorbed the effects of a foiled trans-Atlantic bombing attempt in London.

The ensuing heightened security at airports _ and hassles for passengers _ hurt several carriers' unit revenue growth, which had been strong. To compensate, airlines discounted their fares more than anticipated to keep passengers in seats, which pushed several analysts to lower third-quarter earnings projections.

American Airlines' parent AMR Corp., for example, estimated August's London bombing scare will cost it more than $50 million in third-quarter revenue.

Helping airlines, however, are rapidly falling crude oil prices. Jet fuel is among the industry's top costs, and lower crude prices have helped the Amex Airline Index recently reach its highest point since mid-July.

"We remain bullish on the industry through next year, anticipating stable but high fuel costs (current levels) and a continuing stable economy leading to strong demand and a resumption in ticket price increases early next year," Calyon Securities analyst Ray Neidl wrote in a recent research report.

Neidl recently trimmed his third-quarter earnings estimates for many of the industry's carriers because of lower-than-expected unit revenue growth. But he still sees airlines reporting strong quarterly profits, albeit below pre-bomb threat expectations.

Neidl sees AMR Corp., which kicks off the industry's quarterly earnings season on Oct. 18, reporting a profit of 49 cents per share, down from his prior forecast of 80 cents.

Wall Street overall is looking for 50 cents, according to an analyst poll by Thomson Financial.

2006-10-03T09:16:00.000-07:00

Big Airbus A380 Delays Expected As Emirates, Lufthansa Announce 10-Month Hitch

- Lufthansa and Emirates said Tuesday that their orders for A380 superjumbos will be delayed by up to a further year, and Airbus parent EADS was expected to reveal the full extent of production problems holding back its flagship jet program.

"We have received information from Airbus that we're going to receive the first A380 in summer 2009," said Lufthansa spokeswoman Stefanie Stotz. "That's one year later than anticipated up to now."

EADS declined to confirm or deny that its board was scheduled to discuss a restructuring plan for Airbus and a new delivery timetable for its troubled A380, which was already about a year behind schedule when the latest production problems were disclosed.

Dubai-based Emirates also said Tuesday it had received notice that its A380s will be delayed by 10 more months.

"Emirates has been advised by Airbus of a further 10 month delay to its A380 program, which means that our first aircraft will now arrive in August 2008," Emirates CEO Tim Clark said in a statement.

The new setback is a "very serious issue for Emirates," Clark said, adding that the airline is now reviewing all its options.

The first delivery to Emirates -- originally scheduled this month -- will now be almost two years late. Stotz said Lufthansa now expects delivery between May and September 2009, a similar delay compared with the original delivery target of late 2007.

But Lufthansa appeared to rule out order cancelations.

"We're still convinced that the A380 is a success story and the A380 is a growth aircraft," Stotz said. "As we want to grow, we still believe this is the aircraft we need, especially when capacities and traffic rights are limited."

In recent days, Airbus has been informing A380 customers of the latest setbacks as it tries to gauge the likely compensation bill. EADS had confirmed last month that the plane would be delayed, without giving details.

The announcement had already prompted Emirates to warn on Sept. 21 that its 45-plane order, worth about $13 billion at list prices, was "up in the air." Virgin Atlantic Airways Ltd. also said the delay could affect its order for six superjumbos.

Virgin Atlantic reiterated Tuesday that it had received tentative information from Airbus on the new delays, but declined to give details.

French financial daily La Tribune reported that EADS also plans to announce drastic production changes that would see the closure of A380 cabin-fitting, paint shop and delivery centers in Hamburg, Germany, and the transfer of their workloads to Airbus headquarters in Toulouse, France -- saving on transportation time and costs.

In return, Germany's share of the production of the A320 single-aisle jet family would be increased, according to the unsourced report. It also said Airbus will deliver fewer than four A380s in 2007.

In a statement June 13, the plane maker had already slashed the number of scheduled deliveries in 2007 to nine from 25 as it announced the 555-seater A380's second six-month delay and a 2 billion euro ($2.5 billion) profit warning. EADS shares plunged 26 percent the next day.

The crisis led to the sacking of Airbus boss Gustav Humbert and EADS co-CEO Noel Forgeard -- who remains under investigation by market authorities after it emerged that he exercised stock options to make a profit of $3.2 million just weeks before ordering an internal probe into the delays.

EADS is tightening its control over Airbus and is expected to buy BAE Systems PLC's 20 percent stake in the plane maker. BAE shareholders vote Wednesday on a management recommendation to go ahead with the $3.5 billion sale.

EADS shares, which had fallen recently in anticipation of big new delays, were 0.5 percent higher at 22.51 euros ($28.55) in Paris trading.

2006-09-20T10:47:00.000-07:00

AAR Corp., an aerospace supplier, said Wednesday fiscal first-quarter earnings more than doubled as global demand from the commercial aviation sector spurred a 21 percent sales gain.

Net income in the quarter ended Aug. 31 increased to $11.8 million, or 29 cents per share, from $5.3 million, or 15 cents per share, in the year-ago period. Wall Street was looking for profit of 28 cents per share, according to a Thomson Financial poll of four analysts.

AAR, which operates parts supply and maintenance units, said net sales added 21 percent to $242.2 million from $199.6 million last year. The aviation supply chain unit saw a 19 percent increase in sales as demand from the global aerospace sector remained strong.

The company finished August with $119 million cash on hand.

AAR shares closed Tuesday at $23.22 on the New York Stock Exchange.

2006-09-19T17:42:00.000-07:00

Delta Air Lines Inc is preparing to seek authorization for direct service between Atlanta and China starting in 2008 and is considering a partnership with China Southern Airlines for the route, the Shanghai Daily reported citing Atlanta city officials.

'Delta Air Lines will apply to open direct passenger and cargo services between Atlanta and a Chinese city in 2008,' Atlanta Mayor Shirley Franklin told the paper.

Franklin said Delta Air Lines has met officials with China's General Administration of Civil Aviation and Ministry of Foreign Affairs, seeking to launch its first direct flights between the two nations.

The report cited an Atlanta chamber of commerce official as saying that Shanghai and Beijing were preferred cities, but there has not been a final decision.

It also said China Southern Airlines Co Ltd is likely to be the Chinese partner for the service, due to an existing alliance agreement.

2006-09-04T15:05:00.000-07:00

Airbus A380, World's Largest Passenger Jet, Makes Test Flight With a Full Load of Passengers

The Airbus A380, the world's largest passenger jet, took to the sky with a full load of passengers for the first time Monday, and the European aircraft maker announced further management changes in the wake of costly delays to the $13 billion jet program.

The 308-ton jet touched down Monday evening after flying a seven-hour round-trip from Toulouse, southern France, with 474 Airbus employees on board, on the first of four test flights scheduled this week to try out the plane's cabin environment and systems.

Airbus says it is on schedule to deliver the first finished A380 to Singapore Airlines Ltd. by the end of the year, despite production bottlenecks that are expected to hold up subsequent deliveries by about six months.

The latest hitches led to the ouster of Airbus CEO Gustav Humbert as well as Noel Forgeard, joint CEO of Airbus parent European Aeronautic Defence and Space Co., weeks after they were announced in June.

Monday saw a further management shuffle at Airbus, which named a new head of the A380 program. Mario Heinen, previously in charge of the single-aisle A320 plane family, replaces Charles Champion -- who also steps down from his role as chief operating officer, but stays on as an adviser to Christian Streiff, who succeeded Humbert as CEO in July.

Streiff has imposed a temporary hiring freeze at Airbus and is scheduled to report to shareholders by the end of this month on the full extent of the A380 delays, following a detailed audit.

With the A380, Airbus has bet heavily on future demand for very large planes to fly growing numbers of travelers among the world's increasingly congested major airports. In mid-sized, long-range jets -- where Boeing Co. sees much more demand -- Airbus is about four years behind its U.S.-based rival's next-generation plane, the 787 Dreamliner, tailored to cover more destinations with more frequent, nonstop services.

The A380 can seat 555 people in three classes, but launch customer Singapore Airlines is expected to operate the plane with a configuration similar to the 474-seat layout chosen for the test flights with passengers.

During Monday's sortie over western Europe, about 25 cabin equipment technicians and the remaining volunteers -- chosen from 15,000 Airbus staff who entered an internal lottery -- put the super jumbo's cabin fittings and features through their paces, testing out the seating, air conditioning, kitchens and in-flight entertainment.

Flight tests with volunteer passengers are not a required step toward the plane's certification but nonetheless help to ensure that "airlines will benefit from a fully mature aircraft on delivery," Airbus said in a statement.

The super jumbo is entering the final stages of its test program, with 1,900 hours of flying time already logged by its team of test pilots. Airbus so far has 159 orders for the plane, which is priced at $316 million.

The A380 faces another hurdle in November, when a working group within the International Civil Aviation Organization is due to report back on the A380's "wake vortices" -- air turbulence created by airliners that can be dangerous to other planes flying close behind.

As a precaution because of its size, ICAO has temporarily set a much larger minimum exclusion zone behind an airborne A380 than around Boeing 747 jumbos. If adopted permanently, the rules could hold up airport traffic behind the super jumbo and reduce the plane's efficiency.

Airbus argues that the A380 is no worse for wake turbulence than the largest version of Boeing's 747.

BAE Systems PLC declined to comment Monday on reports that is to decide this week whether to recommend that its shareholders approve the planned sale of the company's 20 percent stake in Airbus.

The British defense group exercised a put-option to sell the stake back to EADS, which owns the remaining 80 percent of Airbus, but an independent assessment commissioned from investment bank Rothschild after negotiations broke down valued the stake $3.52 billion, well below BAE's expectations.

In Paris, EADS shares ended 0.9 percent lower at 23.08 euros ($29.58).

2006-08-10T18:16:00.000-07:00

Security fears may dampen demand for air travel in the short term, industry watchers said on Thursday, after British police foiled a plan to blow up transatlantic jetliners, but they won't throw U.S. airlines off their long recovery from the September 11, 2001 attacks.

It took U.S. airlines almost five years to regain pre-2001 passenger levels, as Americans regained a taste for travel, helped on by a resurgent economy and cheaper fares. This summer, several carriers reported their fullest planes on record.

The latest travel scare may put a dent in that upswing, as the consequences of the plot unravel, analysts said, but existing concerns about record-high oil prices, an economic slowdown and global security remain more of a threat.

"If you are planning a trip in September, and you haven't booked it yet -- you might not," said Helane Becker, an airline analyst at the Benchmark Co. "But on balance we are expecting Americans are fairly resilient. The only concern we have ... is a potential recession."

Shares of transatlantic air carriers fell in early trading, but recovered later as investors took a more robust view of airlines' prospects.

The plot targeted jets operated by Continental Airlines Inc. (CAL), UAL Corp.'s (UAUA) United Airlines and AMR Corp.'s (AMR) American Airlines Inc., according to a U.S. official who asked not to be named.

Shares of Continental were down 1.6 percent at $23.84 in early afternoon trade on the New York Stock Exchange and shares of AMR were down 0.7 percent at $20.16. UAL shares were down 0.7 percent at $23.60.

The slight dips come after a 3 percent drop in the Amex airline index on Wednesday, on fears that ticket price cuts indicated a greater-than-usual dip in demand as the busy summer season winds down.

Shares of other domestic carrier US Airways Group Inc. (LCC) were down 0.4 percent, while Southwest Airlines Co. (LUV) and JetBlue Airways Corp. (JBLU)were up slightly.

Five years ago, the hijack plane attacks on New York and Washington cut U.S. air traffic by 20 percent, hastening the decline of four major carriers into bankruptcy, as the industry shed more than 100,000 jobs and lost billions of dollars.

The latest plan for an attack won't have nearly the same effect, analysts said.

"Fortunately, the summer travel season is mostly complete and virtually all trips planned by vacation travelers this month have already been booked," said Standard & Poor's analysts in a report. They did say, however, that widespread concern over security would likely lead to reduced bookings.

Others stressed the ultimate resilience of the air travel market worldwide.

"As we have seen after previous terrorist events -- 9/11, Madrid, Bali and London bombings -- the world will still fly," said Bank of America analyst Robert Stallard.

2006-08-10T17:03:00.000-07:00

The ink barely dry on second-quarter results showing fuller planes and profits some hadn't seen in years, airlines are again being tested -- this time by a foiled terror plot that is sure to make passengers uneasy about flying.

The financial toll on the carriers and whether they will have to scrap their higher ticket price strategy depends on how long the threat lasts, analysts and industry consultants said on Thursday. But, they pointed out, the airlines have been able to weather such upheaval before.

"Just when they've gotten up and are walking, something like this knocks them down again," said Terry Trippler, an industry expert in Minneapolis. "It's going to be difficult the next 48 to 72 hours, but it will settle down. It always does."

Advanced bookings have been strong and some airlines began offering fare sales this week to help keep seats filled during the traditionally slow early fall season. That should help the airlines withstand a big financial impact from the terror threat, experts said.

"This industry, which is still trying to recover, doesn't need the effects that we might have here," said David Treitel, chief executive of aviation consulting firm SH&E in New York.

That said, Treitel noted this isn't the first time the industry has had to deal with terror threats or actual attacks.

"The strength and resiliency of the business is I think going to manage this situation very effectively so that we won't have much more than the added inconvenience through the next few days," he said.

The plot involved liquid explosives and targeted flights from Britain to the U.S., officials said. U.S. authorities heightened security at airports across the country and raised the threat level to "red" for flights from Britain, the first time the highest threat of terrorist attack had been invoked since the system was created.

All other flights were under an "orange" alert -- one step below red.

Shares of some major airlines sank, meanwhile, and passengers fretted in long lines at security gates at airports.

Fort Worth, Texas.-based American Airlines parent AMR Corp.'s stock closed unchanged at $20.29, after having fallen earlier in the day. Shares of Elk Grove Village, Ill.-based UAL Corp., the parent of United Airlines, fell 1.3 percent to close at $23.52. Houston-based Continental Airlines Inc. shares fell 1.5 percent to close at $23.86.

At Heathrow Airport in London, all short-haul inbound flights had been canceled with several outbound flights also canceled or delayed.

Analysts said the main impact on airlines will come immediately from the cost of canceled flights and in the longer term from extra expenditure on security.

The International Air Traffic Association said it was still too early to tell what effect the terror plot would have on the air industry. A spokesman said Thursday's events could not be compared to the terrorist attacks five years ago in the United States that sent the air industry spiraling.

"We need to remember on Sept. 11, we had four aircraft go down and a huge number of casualties," spokesman Anthony Concil said. "In this case, we saw that the security system worked. There was no aircraft that suffered a breach of security. No one has lost their life."

UAL posted a second-quarter profit of $119 million, its first quarterly profit in six years. It cited higher fares and packed planes. AMR posted a sharply higher profit for the second quarter. It was only AMR's second profitable quarter -- excluding those helped by one-time items -- in the past five years.

Discounters Southwest Airlines Co. of Dallas and AirTran Holdings Inc.'s AirTran Airways of Orlando, Fla., also reported wider profits in the second quarter, with Southwest's earnings more than doubling and AirTran's nearly tripling. Higher fares helped both.

Don't expect travelers to be running away in droves just yet. Atlanta-based Delta Air Lines Inc. said it was operating a normal schedule.

At U.S. airports, many passengers said they are used to the terror threats by now, while other said they have no choice but to take a plane to where they are going.

"At our age we haven't got too many flights left anyway," said 82-year-old Paul Garcia, who showed up at Hartsfield-Jackson Atlanta International Airport on Thursday three hours early to catch a plane to White Plains, N.Y.

People had been waiting up to two hours at security checkpoints at the world's busiest airport in terms of passengers.

People waited hours at U.S. airport terminals to reach security checkpoints. They were ordered to dump all liquids -- water bottles, suntan lotion, even toothpaste.

At Minneapolis-St. Paul International Airport, frequent traveler Sheila Grossinger said she's used to the occasional inconvenience.

"When you travel a lot, you have to learn to be adaptable, but it seems like every few months now there's a new restriction," Grossinger said.

At Kennedy Airport in New York, Sonia Gomes De Mesquita, 40, waited nervously to board a British Airways flight home to London. Her family had urged her not to fly.

"You wake up and what are you going to do?" she said. "The flight is today."

Trippler, the Minneapolis industry expert, said that likely will be a common attitude among passengers.

"If people already have their tickets, they'll probably still go," Trippler said. "But I think it would be foolish to say that some people won't change their plans. The full impact remains to be seen."

2006-08-07T08:38:00.000-07:00

Northwest Airlines 2Q Loss Widens As Revenue Edged Higher

Northwest Airlines Corp., which has been operating under Chapter 11 bankruptcy protection, on Monday posted a wider second-quarter loss as restructuring costs mount.

After paying dividends on preferred stock, losses totaled $285 million, or $3.27 per share, for the three months ended June 30 compared with $234 million, or $2.69 per share, in the prior-year quarter.

Excluding the cost of restructuring and other onetime items, Northwest said it earned $179 million versus a loss of $288 million last year.

Revenue edged higher to $3.29 billion from $3.2 billion in the prior-year period. Operating expenses fell 12 percent to $3 billion.

The airline industry has been suffering the effect of higher fuel costs. Northwest said its fuel averaged $2.10 per gallon, excluding taxes -- up 28 percent year over year. The company offset higher fuel prices by cutting capacity, reducing the number of gallons consumed by 12 percent.

2006-08-06T10:22:00.000-07:00

Judge Lets Firm Continue Charging for Southwest Boarding Passes

In a setback to Southwest Airlines Co., a federal judge has refused to stop a Web company that obtains Southwest boarding passes for its customers.

Southwest sued BoardFirst LLC, charging the Web site with illegally making money off Southwest's business. It sought an injunction to stop BoardFirst from charging customers to obtain coveted "A" boarding passes.

Federal District Judge Jane J. Boyle rejected the airline's request last week. She asked the airline and BoardFirst.com to seek mediation before she schedules a trial.

Kate Bell, a former interior designer who runs BoardFirst from her kitchen in Phoenix, said her lawyer told her the case might not come to trial for a year or longer.

Beth Harbin, a spokeswoman for Southwest, said the Dallas-based carrier was disappointed by the ruling.

Harbin said several other companies that use information from Southwest's Web site have stopped after getting letters from the airline, but BoardFirst did not.

While other airlines issue assigned seats, Southwest boards passengers in three groups. Customers who check in first over the Internet 24 hours before the flight can score an "A" pass and their choice of seats.

BoardFirst charges $5 if it gets an "A" pass for a customer.

2006-08-04T06:23:00.000-07:00

JetBlue adds another Dulles departure

JetBlue will begin nonstop service from Dulles to West Palm Beach, Fla. with one daily flight beginning Oct. 3.

The discount carrier will innaugurate the flights with fares as low as $79 each way.

It is the latest Dulles addition for JetBlue, which will start flying up to six daily flights from Dulles to New York's John F. Kennedy Airport later this month. It already offers nonstop service from Dulles to Boston, making JetBlue a cheap alternative to the Delta and US Airways shuttle flights to New York and Boston out of Reagan National Airport.

JetBlue (NASDAQ: JBLUE) also flies from Dulles to Las Vegas, Fort Lauderdale, Fla., and Oakland, Long Beach and San Diego, Calif.

Discount carriers are filling the low-cost gap at Dulles left by the demise of Independence Air. Southwest Airlines (NYSE: LUV) plans to start Dulles service with 12 daily flights to Las Vegas, Chicago, Orlando and Tampa Bay this fall.

United Airlines' (NASDAQ: UALA) discount brand Ted also operates flights out of Dulles.

2006-08-03T00:51:00.000-07:00

US Air CEO Sells $9 Million in Stock Options

US Airways Group Inc. Chairman and CEO Doug Parker sold 270,000 shares of company stock, exercising options that netted the executive more than $9 million before taxes.

The sale was disclosed in a regulatory filing late Thursday. It is the first time Parker has sold stock or exercised options since joining then-America West Airlines in 1995, a company spokeswoman said.

America West bought US Airways out of bankruptcy in September, taking the US Airways name for the merged company. The stock's price has since more than doubled.

In a letter to the company's employees dated Thursday, Parker said he was exercising the options because a small number were set to expire, and he needed to diversify his portfolio of investments.

Parker also said he planned no further sales this year, and the sale represented less than 20 percent of his options and less than 40 percent of his vested options.

"Please do not take my option exercise as an indication that I believe US Airways is "topping out," Parker wrote employees. "To the contrary, I think we are just getting started. The people of US Airways have a lot more to show our competitors and our customers, and as we do, I believe the value of our company will continue to increase."

Stock in Tempe, Ariz.-based US Airways fell $1.61, or 3.5 percent, closing at $44.95 on the New York Stock Exchange Friday.