China Southern Airlines reached a deal with majority investor China Southern Air Holding Co., a state enterprise owning 50.3% of the carrier, to purchase the entire equity interest in China Southern Airlines Group Air Catering Co., the assets of Guangzhou BiHuaYuan Training Centre and the assets of Hong Kong-based Nan Lung Travel & Express (including its 51% stake in Nan Lung International Freight) for a combined CNY269.5 million ($35.5 million). In turn, CSAHC will purchase CZ's 90% stake in the Guangzhou Aviation Hotel for CNY74.7 million.
China Southern Airlines flew 7.7 billion RPKs in July, up 14.7% from the year-ago month. Capacity climbed 13% to 10.05 billion ASKs, lifting load factor 1.1 points to 76.6%.
Midwest Air Group board said it will meet today to "consider alternatives" following the announcement of competing bids for the carrier from AirTran Holdings and TPG Capital/Northwest Airlines ( ATWOnline, Aug. 15).
Virgin Atlantic reported this week that its profit for its fiscal year ended Feb. 28 dropped 89% to £6.6 million ($13.2 million) from £60.3 million in the prior year. It blamed much of the fall on losses at Virgin Nigeria, in which it has a 49% stake. The African carrier posted a loss of £40 million for the year, widened from £33 million in the prior year. VA's revenue increased 15% to £2.2 billion.
Etihad Airways said its first A320 will commence operations Sept. 1, with two more set to arrive in September and October. A further three of the dual-class, 140-seat aircraft are expected in the 2008 first quarter ( ATWOnline, June 7). First A320 route will be Abu Dhabi-Tehran. Future cities include Beirut, Dammam, Karachi, Muscat, Bahrain, Cairo, Doha, Kuwait, Amman and Damascus.
Copa Holdings, parent of Panama's Copa Airlines and Colombia's Aero Republica, reported second-quarter net income of $30.9 million, up 34.9% over $22.9 million earned in the year-ago quarter, but said its rapid expansion will be slowed slightly.
WestJet, which this summer won authority to operate to four Mexican destinations ( ATWOnline, June 28), yesterday announced scheduled seasonal service to two, San Jose del Cabo and Mazatlan, from three Canadian cities starting in December. From its Calgary base, the LCC will operate twice-weekly to San Jose del Cabo from Dec. 20 and weekly to Mazatlan from Dec. 22. It will launch weekly flights from Edmonton to both destinations on Dec. 21-22 and from Vancouver to San Jose del Cabo on Dec. 21.
AirTran Holdings raised its bid for Midwest Air Group late yesterday, offering $16.25 per share in cash and stock, exceeding the $16 per share cash offer from TPG Capital and Northwest Airlines that was endorsed unanimously by the Midwest board Sunday ( ATWOnline, Aug. 14).
Shenzhen Airlines plans to raise as much as $1 billion in an initial share sale to fund fleet expansion next year, according to a report in the South China Morning Post. As a privately run airline, Shenzhen has found it increasingly difficult to reach loan deals with banks owing to its high asset liability rate, even though it has posted net profits for 10 consecutive years. The carrier remains committed to its "369" strategy of expanding its fleet to 70 aircraft in three years, 100 in six and 160 in nine.
Aer Lingus pilots are planning a two-day strike next week to protest the carrier's plan to set up a base at Belfast International Airport, where the Impact Trade Union claims the proposals for pay and work rules "are less favorable" than in the Republic.
Lufthansa and Air Astana signed a cooperation agreement in the Kazakh capital yesterday that will include codesharing and schedule coordination beginning next year and a linking of the carriers' loyalty programs that may begin as early as October. The deal is similar to the one LH signed with Russia's AiRUnion last month ( ATWOnline, July 12). LH operates a daily Frankfurt-Almaty service with twice-weekly ongoing service to Astana.
Qantas reportedly will spin off its loyalty program in the mold of Air Canada's Aeroplan, which will become part owner of the Australian carrier's Frequent Flyer program, according to newspaper reports in both countries. Neither Qantas nor Aeroplan is commenting, but major media outlets in both countries reported that QF, while keeping a controlling stake in Frequent Flyer, will list it publicly on the Australian Securities Exchange in less than a year and is negotiating with Aeroplan to take a stake. The program is estimated to be worth A$3 billion ($2.5 billion).
American Airlines flew 12.92 billion system RPMs in July, down 2.9% from the year-ago month, as domestic traffic fell 2.3% and international dropped 4%. Capacity declined 3.7% to 14.7 billion ASMs on a 3.5% domestic drop and a 4.1% international decrease. System load factor was up 0.8 point to 87.9%. Domestic rose 1.1 point to 89.4% and international was up 0.2 point to 85.2%. United Airlines flew 10.92 billion RPMs in July, a 1.4% decrease from the year-ago month. Capacity fell 1% to 12.5 billion ASMs and load factor was down 0.4 point to 87.3%.
CAE signed an agreement to acquire Flightscape for approximately C$18 million ($17.1 million). Flightscape is an Ottawa-based safety company providing expertise in flight data analysis and flight sciences, CAE said.
Icelandair Group, while admitting that "increased network capacity has not led to the passenger revenue growth we had hoped for," yesterday reported a ISK205 million ($3.1 million) second-quarter profit that represented a plunge from pro forma earnings of ISK1.25 billion in the year-ago quarter.
Frontier Airlines named Air Canada Executive VP-Commercial Strategy Sean Menke president and CEO replacing Jeff Potter, who will resign Sept. 6 to become CEO of luxury vacation home provider Exclusive Resorts. Menke previously worked for Frontier from January 1999 to June 2005, when he left his post as senior VP and COO to become Air Canada's CCO. Potter, who announced earlier this month that he was leaving the Denver-based airline ( ATWOnline, Aug. 6), will remain on Frontier's board.
Air New Zealand's ongoing battle with local airports continued yesterday with the airline forced turn to the courts, this time to protest increased landing charges at Wellington. ANZ is seeking a Judicial Review of recent charges imposed by Wellington International Airport Ltd. and had filed proceedings with the High Court in the capital. Last month it filed for a Judicial Review of charges imposed by Auckland International Airport Ltd. ANZ Counsel John Blair claimed that the airline's costs will increase by 34% over the next four years.
Midwest Air Group closed the door on an acquisition by eager AirTran Holdings, opting instead to pursue an unexpected all-cash deal offered by private equity investment firm TPG Capital, which is partnering with Midwest neighbor Northwest Airlines. TPG Capital, which has been involved in recent bids for Qantas, Alitalia and Iberia, could finalize a "definitive" merger agreement with Midwest as early as Aug. 15, both TPG and Midwest said.
AirTran Airways parent AirTran Holdings said an error related to passenger revenue accounting required a restatement of its first-quarter earnings. Net profit for the three months ended March 31 was reduced to $2.2 million from the $2.4 million it reported in April ( ATWOnline, April 13), compared to an $8.9 million loss in the year-ago quarter. First-quarter operating income was $12.9 million rather than the originally stated $13.4 million.
Rwanda government selected Brussels Airlines and Meridiana Africa Airlines for the privatization of Rwandair Express, l'Echo reported, citing Rwandair President Manzi Kayihura as saying that the company with the best strategy would win the tender rather than the one with the highest bid. Rwandair is seeking to place 40% of its capital with an industrial investor and 40% with private investors, leaving the state with 20%. The airline currently operates one 37-seat Dash 8 and one 142-seat MD-82.
Lufthansa flew 11.03 billion RPKs in July, up 5.7% on the year-ago month, against a 3.6% increase in ASKs to 13.71 billion. Load factor was up 1.6 points to 80.4%. Iberia flew 4.97 billion RPKs in July, a 7.1% increase from the year-ago month. Capacity climbed 3.1% to 5.76 billion ASKs and load factor rose 3.2 points to 86.3%. Copa Airlines flew 466.8 million RPMs in July, a 25.2% increase from the year-ago month. Capacity rose 22.2% to 548.9 million ASMs, lifting load factor 2 points to 85%.
Consortium consisting mainly of Italian financial groups and entrepreneurs has emerged as a possible bidder for Alitalia, Reuters reported. The new group has more than five Italian and foreign members representing both financial and corporate interests, according to an attorney representing it who declined to identify members. Apparently none participated in the recently failed auction set up by the government ( ATWOnline, July 31).
Qantas has set aside $40 million "to cover a potential fine that may be imposed" by the US Dept. of Justice as part of the international investigation into price-fixing.
