AirAsia is booming, enjoying its "best quarter ever," according to CEO Tony Fernandes, and boosted its full-year guidance following yesterday's announcement that it posted a MYR150.1 million ($42.9 million) profit in the second fiscal quarter ended Dec. 31, about triple its MYR51.3 million profit in the year-ago period.
US Airways said it entered into a commitment letter with Citigroup Global Markets and Morgan Stanley Senior Funding to arrange debt financing of up to $1.6 billion that would permit the airline to refinance $1.26 billion of its existing senior secured credit facility, refinance $325 million of unsecured debt and raise incremental liquidity. The transaction should be completed by the end of the current quarter, US said.
Airline Partners Australia's A$11 billion ($8.8 billion) bid for Qantas ( ATWOnline, Feb. 23) has hit turbulence, with two key stakeholders suggesting that the $A5.60-per-share offer undervalues the airline. According to Australia's Financial Review, UBS Global Asset Management, which holds 6% of QF, is unwilling to sell while Balanced Equity Management, with 3%, is unconvinced. APA has said its offer is conditional on 90% acceptance.
Indonesian government announced a ban on commercial aircraft older than 10 years this week following several mishaps and accidents, the worst of which was the January crash of a 17-year-old Adam Air 737-400 that killed 102 ( ATWOnline, Jan. 26). According to the Associated Press, Transport Minister Hatta Rajasa insisted the regulation would not require parliamentary approval but did not indicate when it would go into effect. The current age limit is 20 years.
Aeroports de Paris sold its interest in Beijing Capital International Airport Co. for HK$1.97 billion ($252.1 million) through an accelerated placement with institutional investors. ADP held 16.2% of BCIA's Hong Kong-listed shares. The French airport operator did not disclose its reason for offloading its stake but said it "reaffirms its willingness to accompany the Chinese authorities in their development of airports in China, in particular at the regional level."
Midwest Airlines said in a letter to shareholders yesterday that "AirTran's business is deteriorating" and that it wants to acquire Midwest to prevent further erosion. "AirTran leaves a trail of broken promises in markets it enters with great fanfare," said the letter signed by Midwest Chairman and CEO Tim Hoeksema.
Embraer announced the sale of five E-190s, plus five options for either E-190s or E-195s, to M1 Travel, the largest shareholder of Swiss regional Flybaboo, which currently operates two Dash 8s to 120 destinations. Deliveries are scheduled to begin next year. The airline will lease the first three aircraft from M1, which selected the Steep Approach option that will enable it to operate the aircraft into London City, Sion, Lugano and Florence. The first two will be new Flybaboo destinations. Value of the deal if all options are exercised could reach $355 million at list prices.
Pinnacle Airlines reported net income of $77.8 million for full-year 2006, widened from $25.7 million in the prior year despite a 2% drop in revenue to $824.6 million.
Iberia Group yesterday reported a net profit for the 11th consecutive year, though earnings of €57 million ($75 million) in 2006 fell a precipitous 85.6% from the €396 million posted in 2005 when the company benefited from gains from the sale of Amadeus and Savia.
MTU Aero Engines and JetBlue signed an agreement to extend the terms of a contract concluded in 2005 ( ATWOnline, June 29, 2005) from 10 to 15 years, bringing the deal's overall value to €2.4 billion ($3.16 billion). The original contract provided for nearly all 400 of the LCC's V2500s to visit MTU's shop at Langenhagen for maintenance. Under the extension, 116 IAE engines scheduled to be delivered to the airline from 2009 will be built to the upgraded SelectOne standard.
Grupo Ferrovial announced that Macquarie Airports exercised its call option on Ferrovial's 20.9% stake in the company owning the rights to Sydney Airport ( ATWOnline, March 30, 2006) for the agreed price of A$1.01 billion ($799.2 million). Ferrovial Aeropuertos will net A$919 million on the sale. The Spanish company said the share transfer will take place March 16-20.
Air Tran Airways said a merger with Midwest Airlines would create 1,100 new jobs in Milwaukee and add 74 flights out of Mitchell International Airport. In a filing with the US SEC this week, AirTran offered details that painted a positive economic outlook if it acquires Midwest, estimating that the total economic benefit to Wisconsin would be nearly $1 billion annually ( ATWOnline, Feb. 2).
Air New Zealand's radical cabin interior makeover was credited for a 61% hike in net profit to NZ$74 million ($52.4 million) for the six months to Dec. 31, with long-haul yields jumping 12.7% as passengers upgraded to its Premium Economy and Premier Business products. Operating revenue rose 12% to NZ$2.1 billion while expenses increased 10.1% to NZ$1.72 billion. As expected, fuel was the biggest item and grew 13% to NZ$584 million. Operating profit was NZ$109 million versus the 2005 period's NZ$81 million.
Qantas Group selected the GEnx to power its fleet of up to 115 787s. CFO Peter Gregg called the choice "a difficult one following an exhaustive eight-month evaluation process." The initial order is for engines for 45 firm aircraft and was valued by Qantas at A$2 billion in "capital and maintenance costs over the life of the engines." It gives the GEnx a significant edge on 787 customers, with orders for 216 aircraft compared to 125 for the Trent 1000.
OnAir, the Airbus-SITA joint venture, named former Airbus Senior VP-Finance Benoit Debains as its new CEO effective March 1, replacing George Cooper. It also named SITA VP David Russell as OnAir COO.
Air Berlin reported a 2006 net profit of €50.1 million ($65.9 million) yesterday, a dramatic reversal from the €115.9 million loss in 2005 ( ATWOnline, April 12, 2006). "Despite the costs of going public and the integration of dba. . .our net profit even exceeded the expectations of most analysts," AB CEO Joachim Hunold said. Sales rose 28.6% to €1.57 billion and operating income was €64.1 million compared to a €5.5 million loss in the prior year.
Malev Hungarian Airlines sale to AirBridge, a consortium led by KrasAir CEO Boris Abramovich, concluded Friday ( ATWOnline, Feb. 9). The purchase price was a little more than $1 million, according to press reports. The consortium, which also includes two Hungarian investors, committed to capital investment of $66 million and the repayment of $68 million in debt by year end, according to UPI, while the BBC reported that Abramovich said Malev will return to profitability within two years.
Jordanian government plans to retain a 26% stake in Royal Jordanian when it proceeds with the carrier's privatization later this year but may eventually sell, RJ President and CEO Samer Majali said. "I'm not sure that the Jordanian government intends to remain a shareholder over the long term," he said last week at ATW's Winning Airline Strategies conference in Washington, where he accepted the magazine's Phoenix Award.
Spain's Vueling Airlines posted a net loss of €10.8 million ($14.2 million) last year, a slight widening of the €10.6 million loss suffered in 2005 and worse than its own forecast of a €7.1 million deficit. Results were affected by new international accounting regulations, higher-than-expected publicity expenses and costs related to its IPO. Revenues more than doubled to €235.6 million as it launched service to 18 new destinations and carried 3.5 million passengers with a load factor greater than 70%.
Malaysia Airlines yesterday reported a net loss of MYR136 million ($39 million) for full-year 2006, improved over a loss of MYR1.7 billion the prior year.
Japan Airlines on March 25 will redeem ¥79.7 billion of convertible bonds due to mature in 2011, the company said in a stock exchange filing cited by Bloomberg News, which said investors had until Feb. 23 to convert the ¥100 billion of bonds into stock but that shares in JAL closed 32% lower than the bonds' conversion price. JAL said it is seeking a ¥60 billion credit line to help repay the bonds, according to Bloomberg.
FL Group of Iceland raised its stake in American Airlines parent AMR Corp. to 8.63%. The company purchased a 5.98% share in December ( ATWOnline, Jan. 3) and now with the additional investment "appears" to be AMR's largest single shareholder, the Fort Worth Star Telegram reported. "We have been following the airline industry in the US and we believe AMR Corp. presents strong prospects for 2007," FL CEO Hannes Smarason said.
Virgin Atlantic Airways reached agreement with Airbus to reschedule delivery of the remaining six A340-600s it has on order, the carrier confirmed to ATWOnline. In August 2004 it placed an order for an additional 13 -600s with options for a further 13. "We were due to take delivery of another six A340-600s over the next two years, but we have stretched this out over the next four years," Communications Director Paul Charles said.
Qatar Airways installed an instant loyalty program enrollment kiosk in its business class lounge at Doha. The kiosk dispenses membership cards "within seconds" of the new member's registration.
Brian Rowe, a giant in the history of jet engines and a man closely associated with the rise of General Electric into the leadership position it currently enjoys in the jet engine business, died Feb. 22 following surgery. He was 75. Rowe led GE-Aviation from 1979 to 1993, serving as the division's president and CEO as well as a corporate senior VP.
