GE Capital estimates a pre-tax exposure of $300-$550 million for megalessor GECAS owing to the anticipated traffic downturn in 2009. In an investor presentation this week, GE Capital estimated that a 1%-2% decline in global airline traffic would result in the smaller exposure, while the "downside case" assumes a 3% decline in RPKs and the liquidation of two airlines, resulting in the higher figure. GECAS represents 7% of GE Capital's assets. Its aircraft portfolio is worth $47 billion and it has earned $6 billion since 2001, according to the parent.
Tianjin-based Okay Airways will shut down for one month owing to conflicts between airline management and controlling stakeholder Juneyao Group, which sent a letter to CAAC claiming it no longer is able to guarantee Okay's operational safety. The carrier will suspend operations from Dec. 15 to Jan. 15, as instructed by CAAC, which will send staff to audit Okay's safety standards. It has delayed taking delivery of its second MA60 ( ATWOnline, Oct. 21).
US Air Transport Assn. named Delta Air Lines GM-Security Technology, Compliance and Facilitation Eric Thacker as director-security operations responsible for daily coordination with the Transportation Security Administration, effective immediately. It also appointed DL Director-Government Affairs Sametta Barnett as MD-security effective next month.
Air Berlin reported a €45.6 million ($57.7 million) third-quarter profit, up 43.2% from the €31.9 million earned in the year-ago period, on an 8.6% year-over-year lift in revenue to a company record €1.06 billion. Operating profit rose 57% to €89.1 million from €56.8 million. AB said its efficiency program "is bearing fruit," citing an 8.8% fall in passenger numbers to 8.6 million but a 15.3% lift in unit revenue to 7.66 euro cents. Nine-month EBIT swung to a €35.1 million profit from a €9.5 million loss in the year-ago period.
British Airways flew 8.71 billion RPKs in November, down 5.9% from the year-ago month. Capacity fell 3.1% to 11.72 billion ASKs and load factor dropped 2.2 points to 74.4%. American Airlines flew 9.53 billion system RPMs in November, down 14.5% year-over-year, against a 9.3% drop in capacity to 12.45 billion ASMs. Load factor was down 4.6 points to 76.6%. American Eagle flew 568.1 million RPMs, down 21.5%, while capacity fell 15.9% to 844.2 million ASMs. Load factor dropped 4.8 points to 67.3%.
Proposed merger of British Airways and Qantas announced Tuesday already is generating controversy in Australia, some 19 months after similar sentiments helped derail a leveraged buyout of QF by a multinational consortium.
Southwest Airlines won US Bankruptcy Court approval to purchase ATA Airlines' 14 slots at New York LaGuardia for $7.5 million ( ATWOnline, Nov. 20), Bloomberg News reported. Sale will be finalized when ATA's bankruptcy plan is approved. SWA currently flies to Chicago Midway, Baltimore, Las Vegas and five Florida destinations from Long Island Islip. SWA flew 5.26 billion RPMs in November, down 8.3% year-over-year. Capacity rose 0.4% to 8.33 billion ASMs, dropping load factor 6.1 points to 63.2%.
Delta Air Lines said yesterday that systemwide capacity for both it and new subsidiary Northwest Airlines will be down 6%-8% in 2009, comprising a 3%-5% international cut and an 8%-10% domestic reduction. The capacity down-gauging from 2007 to 2009 collectively will total around 20%, equaling the capacity slashed by United Airlines over the two-year period. It likely will necessitate further job cuts, DL CEO Richard Anderson and President Ed Bastian told employees in a memo.
Nordic Aviation Capital and KIRK Kapital announced a sale and leaseback deal with AMR Leasing Corp. covering 39 ATR 72s operated by San Juan-based Executive Airlines, which flies as American Eagle. NAC and KIRK, both based in Denmark, established a joint venture called NK Aviation Ltd., Ireland that will lease the aircraft back to Executive. AMR said the deal was worth approximately $200 million, according to press reports.
Aeroports de Paris and Schiphol Group obtained all approvals and authorizations required to complete the 8% cross-shareholding announced in October ( ATWOnline, Oct. 22). Schiphol acquired an 8% stake in ADP from the French government for €530 million ($671 million), or €67 per share. ADP spent €370 million an 8% stake in Schiphol through its subscription to a reserved capital increase. The airport operators' initial cooperation agreement will last for 12 years.
Noncash losses on fuel hedges and currency fluctuations dragged AirAsia to its first quarterly loss since going public in 2004, a MYR465.5 million ($128.2 million) third-quarter deficit that represented a reversal from the MYR180 million earned in the year-ago period.
British Airways and Qantas are exploring a potential merger "via a dual-listed company structure," both carriers confirmed yesterday in a brief statement responding to recent speculation. The oneworld partners warned that there is "no guarantee that any transaction will be forthcoming" and did not offer any timeline for a possible transaction.
Lufthansa confirmed to ATWOnline yesterday that it temporarily has removed four A300-600s from service as a result of reduced demand. "We have parked the aircraft for an unspecified time," a spokesperson said. LH has no current plans to park additional aircraft, but if further capacity adjustments are necessary it will consider removing A340-300s from the fleet, the spokesperson added.
Alitalia's relaunch under the ownership of the Compagnia Aerea Italia investor group will be delayed until "after Christmas vacations to avoid the most congested holiday period," Italian Minister of Productive Activities Claudio Scajola told reporters in Rome, according to Reuters. "I don't see any major problems if it becomes operational after 10-15 days. With all the problems we've had, this is definitely the least of them," he said. CAI originally was supposed to take control of AZ on Nov. 30 but now will assume ownership on Dec.
Ryanair launched a new takeover bid for rival Aer Lingus yesterday with an all-cash offer valuing the Irish flag carrier at €748 million ($949 million). The LCC's hostile offer of €2.80 per share was thwarted two years ago ( ATWOnline, Dec. 22, 2006). It now intends to offer €1.40 per EI share, a price that represents a premium of 25% over last Friday's closing price of €1.12. Ryanair already is EI's largest shareholder at 29.82%.
China Southern Airlines last week received notice that China's Ministry of Finance agreed to inject CNY3 billion ($438.9 million) in the carrier's holding company, it said in a filing with the Stock Exchange of Hong Kong. China's beleaguered national carriers have been appealing to the government for aid ( ATWOnline, Oct. 31). Trading in CZ shares was suspended Nov. 26-27.
Saudi Arabian LCC Sama named Bruce Ashby CEO, replacing Andrew Cowen. Ashby formerly was president and CEO of IndiGo and US Airways executive VP-marketing and planning.
Mesa Air Group announced a settlement with the former controlling shareholder of Aloha Airlines, Yucaipa Cos., ending the latter's lawsuit against the go!
Tiger Airways and Tiger Airways Australia parent Tiger Aviation posted a S$9.9 million ($6.5 million) profit in the fiscal year ended March 31, the Centre for Asia Pacific Aviation reported. Result compares to a S$24.7 million loss the previous year. The Singapore-based mainline reported a S$37.8 million profit ( ATWOnline, Aug. 11), while the new Australian subsidiary posted a A$12.2 million ($8 million) operating loss.
WestJet yesterday began offering passengers a "blanket and pillow kit" for C$7 ($5.64). Passengers may keep the pillow and fleece blanket or continue to use WestJet's reusable blankets for free during flights.
Volvo Aero Services Corp. reached a five-year preferred supplier agreement with Ethiopian Airlines to position more than $20 million in engine material to support MRO activities. In exchange, ET will provide VAS with MRO support on select engines and material.
United Airlines parent UAL Corp. entered into agreements with J.P. Morgan Securities and Morgan Stanley & Co. to sell up to $200 million in stock "from time to time" through either broker. Air Canada reached agreement with Aeroplan to "accelerate" approximately C$70 million ($56.4 million) in payments by Dec. 31 for reward tickets issued for travel through May 29, helping AC boost near-term liquidity.
Austrian Airlines Group said it expects €240-€290 million ($304.5-367.9 million) in one-off impairment charges to appear on its full-year financial report, which could drag the company's net loss to nearly €500 million. In late October it said it expected a €100-€125 million net loss before special items ( ATWOnline, Oct. 29). AAG said €150-€200 million will be related to the falling value of its fleet, especially its 767-300ERs, while around €90 million is related to tax deferrals.
