Tag: cost (Page 13 of 16)

Wizz Air Looks to Connect the Dots with Long-Range A321’s

June 19, 2019 / WIL BALDWIN

LE BOURGET, France, June 19 (Reuters) – Wizz Air will use 20 new extended-range, narrow body Airbus jets primarily to connect existing destinations in its disparate network rather than to fly to new places, the budget airline’s Chief Executive Jozsef Varadi said on Wednesday.

Indigo Partners, the private equity firm of veteran low-cost airline investor Bill Franke, agreed on Wednesday to acquire 50 of the new long-range version of Airbus’ A321neo jet, 20 of which will go to Wizz.

Wizz, which operates a fleet of 113 Airbus A320 and Airbus A321, would not need to change its operating model to accommodate the new A321XLR jets, Varadi said, as it would be able to fly essentially the same planes a little longer.

“Our network spans from the Canary Islands to Astana in Kazakhstan, from Reyjavik in Iceland to Dubai,” Varadi told Reuters after the announcement at the Paris Airshow.

“The XLR gives use the opportunity to connect more dots in our existing network. This is what we’re looking at.”

Airbus opened the Paris Airshow with the launch of the A321XLR, but the announcement was overshadowed on Tuesday when Boeing said British Airways-owner IAG intended to order 200 of its grounded 737 MAX jets.

Hungary-based Wizz, which is focussed on central and eastern Europe, said it had used existing option positions to secure the deal for the A321XLRs, bringing the airline’s total of outstanding firm orders for Airbus aircraft to 276 jets.

Varadi said that in the longer term, it was possible the jet would help open routes to new destinations, but it was not a priority.

“We have always been excited about planting new flags in new territories,” Varadi said. “But the vast majority of the XLR capacity will come in existing markets.”

(Reporting by Alistair Smout; Editing by Mark Potter)

Fuji Dream Orders Two E175’s to Add to its All-Embraer Fleet

June 18, 2019 / WIL BALDWIN

Paris, France, June 18, 2019 – Embraer announced today, at the 53rd International Paris Air Show, that it has signed a contract with Japan’s Fuji Dream Airlines (FDA) for a firm order of two E175 jets. The order has a value of USD 97.2 million, based on 2019 list prices, and was already included in Embraer’s 2019 first-quarter backlog as “undisclosed.”

“We are extremely pleased to continuously grow our fleet and our relationship with Embraer,” said Yohei Suzuki, Chairman and CEO of Fuji Dream Airlines. “FDA currently operates 14 aircraft – three E170s and eleven E175s. These new aircraft will give us the ability to grow our capacity, allowing us to add more routes and frequencies, while also offering our passengers the best cabin in its category.”

FDA’s new E175s will be configured in a single-class layout with 84 seats, with deliveries starting in 2019. Embraer delivered the first E-Jet, an E170, to Fuji Dream Airlines in 2009.

“After nearly 10 years of operations, Fuji Dream Airlines has established itself as an exemplary model for sustainable growth with the support of the E175’s unrivaled attributes underpinning the success of their continued network expansion with new point-to-point services,” said Cesar Pereira, Asia Pacific Vice President, Embraer Commercial Aviation. “As a testament to Embraer’s merits, there will be a total of 48 E-Jets flying in Japan by the end of 2019. Of which, FDA’s all-Embraer fleet of 14 aircraft represents the largest of its kind in Asia and has a world leading 99.83% dispatch reliability – yet another example of how Embraer’s products and customer support have been setting new standards in the industry.”

The E175 is the best seller of the E-Jets family with more than 770 orders from airlines and lessors around the world. Since January 2013, Embraer has sold more than 565 E175s to airlines in North America alone, earning more than 80% of all orders in the 70-76-seat jet segment.

FDA and Embraer have also signed an extension of the Pool Program to cover its fleet of E170s and E175s, including these new orders. The program includes the advance exchange and repair management for more than 300 essential line replacement units of the aircraft.

Embraer is the world’s leading manufacturer of commercial aircraft up to 150 seats with more than 100 customers from all over the world. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleet of 75 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline carriers.

Air Lease Places 3 New Airbus A321-200neo’s with Sky Airline

June 18, 2019 / WIL BALDWIN

PARIS, France, June 18, 2019 – Today Air Lease Corporation (NYSE: AL; “ALC”) announced long-term lease placements with Sky Airline (Chile) for three new Airbus A321-200neo aircraft. Scheduled to deliver to Sky starting in 2020 through 2021, the three new A321-200neos will deliver from ALC’s order book with Airbus and join three A320-200neos currently on lease to the airline from the Lessor.

“Sky Airline is a key ALC customer in the Latin American market and we are pleased to be the first to place the A321-200neo in the airline’s growing narrowbody fleet,” said Steven F. Udvar-Házy, Executive Chairman of Air Lease Corporation. “The A321-200neo will complement Sky’s current highly competitive fleet with a new standard of fuel-efficiency and passenger comfort.”

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including expected delivery dates. Such statements are based on current expectations and projections about our future results, prospects and opportunities and are not guarantees of future performance. Such statements will not be updated unless required by law. Actual results and performance may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including those discussed in our filings with the Securities and Exchange Commission.

About Air Lease Corporation (NYSE: AL)

ALC is a leading aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. ALC and its team of dedicated and experienced professionals are principally engaged in purchasing commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. For more information, visit ALC’s website at www.airleasecorp.com.

About Sky Airline

Sky Airline is a leading low-cost airline based in Santiago, Chile. The company flies to more than 20 destinations in Chile and South America and operates a modern fleet of Airbus A320 and A320neo family aircraft. In 2018, Sky Airline was named the best low-cost airline in South America by Skytrax.

Pentagon Gets 8.8% Discount in $34 billion F-35 Jet Deal

June 10, 2019 / WIL BALDWIN

WASHINGTON (Reuters) – The U.S. Department of Defense has a “handshake” agreement with Lockheed Martin Co to cut 8.8 percent from the price of its latest order of F-35A fighter jet, shaving a year from the time frame in which each aircraft will cost less than $80 million, a Pentagon official said on Monday.

The Pentagon said over three years the agreement will be worth $34 billion for 478 F-35 fighter jets. It is preliminary and a final deal is expected to be sealed in August for the 12th batch of jets, one of the most expensive aircraft ever produced.

The preliminary agreement details the first year, and lays out agreed upon options for two additional years. The options are there because official purchases cannot be made until the U.S. Congress approves an annual budget for those years.

This year’s agreement will lower the cost of each F-35A, the most common version of the aircraft, to $81.35 million, Under Secretary of Defense Ellen Lord said, down from $89.2 million under a deal inked in August 2018.

Under the options covering the second and third years of the purchase, the price of each jet will drop below $80 million, Lord said. In those later years production would be around 160 jets per year.

The F-35 program has long aimed at growing the fleet to more than 3,000 jets and bringing the unit price of the F-35A below $80 million through efficiencies gained by ordering larger quantifies.

“I am proud to state that this agreement has achieved an estimated 8.8% savings from Lot 11 to Lot 12 F-35A’s, and an estimated average of 15%” reduction across all variants from Lot 11 to Lot 14, Lord said in the statement. That savings exceeded expectations in a RAND Corp study.

“The unit price for all three F-35 variants was reduced and the agreement will include an F-35A unit cost below $80 million in Lot 13, exceeding the Pentagon and Lockheed Martin’s long-standing cost reduction commitment earlier than planned,” the Lockheed Martin F-35 program general manager Greg Ulmer said in a statement.

While being a major part of Lockheed’s revenue, the F-35 has recently been holding competitions to find less expensive subcontractors to help control costs.

The new pricing could encourage more foreign customers to join the F-35 program. Lockheed executives have said that any country with an F-16 jet, the predecessor to the F-35, is a potential customer. This could put the market size at about 4000 jets, Lockheed CEO Marillyn Hewson recently told an investor conference.

Vice Admiral Mathias Winter, the head of the Pentagon’s F-35 office, has testified to Congress, that “future potential foreign military sales customers include Singapore, Greece, Romania, Spain and Poland.”

Foreign military sales like those of the F-35 are considered government-to-government deals where the Pentagon acts as an intermediary between the defense contractor and a foreign government.

Other U.S. allies have been eyeing a purchase of the stealthy jet including Finland, Switzerland and the United Arab Emirates.

(Reporting by Mike Stone in Washington; Editing by Bill Rigby and David Gregorio)

FILE PHOTO: A Lockheed Martin F-35A Lightning II aircraft takes part in flying display during the 52nd Paris Air Show at Le Bourget Airport near Paris

Spirit Airlines Bringing its Low Fares to Nashville

June 5, 2019 / WIL BALDWIN

MIRAMAR, Fla., June 03, 2019 (GLOBE NEWSWIRE) — Are you ready for some live music and hot chicken? Spirit Airlines is bringing its low fares and signature service to Nashville, Tennessee. Beginning October 10, 2019, Spirit (NYSE: SAVE) will begin nonstop daily service from Nashville International Airport (BNA) to Baltimore/Washington, Fort Lauderdale, New Orleans, Las Vegas and Orlando. The airline will also add nonstop service to Tampa on November 5. The six routes will operate year-round and create dozens of connections to some of Spirit’s most popular destinations, throughout the U.S., Caribbean and Latin America.

Spirit Airlines is starting service to/from Nashville, TN (BNA) to Baltimore, MD/Washington, DC (BWI), Fort Lauderdale, FL (FLL), New Orleans, LA (MSY), Las Vegas, NV (LAS), Orlando, FL (MCO) and Tampa, FL (TPA).

“Spirit Airlines is excited to announce service to Music City,” said Ted Christie, Spirit Airlines’ President and Chief Executive Officer. “Nashville is one of the fastest growing cities in the country and has a lot to offer. From the best live entertainment and family-friendly attractions to a robust food and craft beer scene, there is something for everyone. We’re equally excited to bring our new Nashville-area Guests to great destinations throughout the U.S., Latin America, and the Caribbean.”

“Today’s announcement is exactly why Nashville International Airport is focused on expanding and renovating our facilities, so we can continue to attract new air carriers and provide additional routes for travelers to and from Middle Tennessee,” said Doug Kreulen, Nashville International Airport’s President and Chief Executive Officer. “We appreciate Spirit Airlines’ investment and confidence in our community, and we look forward to a successful collaboration as we grow our airport and generate economic activity for our region.”

“Spirit Airlines marks the 15th airline carrier operating at Nashville International Airport,” said Dr. A. Dexter Samuels, Nashville International Airport’s Board Chair. “The addition of new airlines and more air service creates competition in various markets and helps keep air fares affordable for our passengers. It’s a dynamic that well serves both the business and leisure traveler and underscores our strategic direction at BNA. On behalf of the BNA Board of Commissioners, welcome to Nashville.”

Nashville, TN (BNA) to/from:	Starts:	Frequency:
Baltimore, MD/Washington, DC (BWI)	October 10, 2019	Daily, year-round
Fort Lauderdale, FL (FLL)	October 10, 2019	Daily, year-round
New Orleans, LA (MSY)	October 10, 2019	Daily, year-round
Las Vegas, NV (LAS)	October 10, 2019	Daily, year-round
Orlando, FL (MCO)	October 10, 2019	Daily, year-round
Tampa, FL (TPA)	November 5, 2019	Daily, year-round

The announcement will add to Spirit’s growing network, as the value carrier recently announced it would be launching service in Burbank, Sacramento, and Charlotte on June 20. While expanding its network, the airline is also focused on investing in the Guest experience and delivering the best value in the sky.

Announcement video can be used for publication via YouTube: https://youtu.be/DbyFM6xtN0E

About Spirit Airlines:
Spirit Airlines (NYSE: SAVE) is committed to delivering the best value in the sky. We are the leader in providing customizable travel options starting with an unbundled fare. This allows every Guest to pay only for the options they choose — like bags, seat assignments and refreshments — something we call À La Smarte. We make it possible for our Guests to venture further and discover more than ever before. Our Fit Fleet® is one of the youngest and most fuel-efficient in the U.S. We operate more than 600 daily flights to 76 destinations in the U.S., Latin America and the Caribbean, and are dedicated to giving back and improving the communities we serve. Come save with us at spirit.com. At Spirit Airlines, we go. We go for you.

JetBlue in Talks With Airbus on A321XLR Airplane

June 3, 2019 / WIL BALDWIN

SEOUL (Reuters) – JetBlue Airways Corp is in discussions with Airbus SE about the European planemaker’s plans for a longer-range version of its A321neo family as it prepares to jump into the transatlantic market, Chief Executive Robin Hayes said on Monday.

The sixth-largest U.S. carrier has 85 A321neo aircraft on order, of which it has already decided to convert 13 into a longer-range version called the A321LR for its planned launch of daily flights from New York and Boston to London in 2021.

But if the low-cost carrier decides to fly to other European cities such as Brussels or Amsterdam, it will need a plane with more stamina. It is studying the A321XLR, which Airbus has been promoting ahead of a formal product announcement in June.

“London is the biggest opportunity because it has the highest fares, but there would be other opportunities if we had an airplane that had more range. The XLR gives us more range,” Hayes said on the sidelines of a global airlines meeting in Seoul.

“We’re still working through how many aircraft it would be (but) any XLRs would be linked to the planes we have on order today,” he told Reuters in an interview, adding any purchases would be converted from existing orders rather than generating completely new ones. No decision has yet been taken.

JetBlue is betting on its Mint business class product for narrowbody aircraft to succeed in the highly competitive premium transatlantic market. As of now, its U.S. customers have to fly to London on rival carriers where business class seats can cost as much as $12,000.

In the United States, JetBlue has argued that its Mint seats have driven a 50 percent decline in premium fares on some competing routes, and by sticking with narrowbody jets Hayes believes seats will be full.

U.S. carriers like American Airlines Group Inc and United Airlines service London with widebody aircraft that Hayes said can be tough to fill during off-peak travel.

“The transatlantic market is very seasonal. In the summer you tend to do very well but in the winter you’re flying a bunch of empty seats, so the LR helps us manage significantly the risk of the winter because we’re not flying such an expensive airplane.”

A handful of Europe-based budget carriers have tried to penetrate the transatlantic market in recent years, but only cash-strapped Norwegian Air is still standing.

Hayes said he expects to work on code-share agreements with partners that have a strong presence in Europe, where the airline wants to eventually build up its brand.

A number of JetBlue’s 50 airline partners have already reached out, he said.

(Reporting by Tracy Rucinski; Editing by Tim Hepher, Christopher Cushing)

AirAsia in Talks to Buy Proposed New Airbus A321XLR

May 31, 2019 / WIL BALDWIN

May 31 (Reuters) – Malaysian low-cost carrier AirAsia is in negotiations to buy a proposed new longer-range version of the best-selling Airbus A321 passenger jet, two people familiar with the matter said.

Airbus has begun tying up customers for the A321XLR ahead of a possible formal announcement of the modified version at the Paris Airshow in June, though the timing of any deal between Airbus and AirAsia remains unclear.

Airbus declined to comment. AirAsia was not available for comment.

(Reporting by Tim Hepher; editing by Richard Lough)

Tesla Stock Drops For Sixth Straight Session

May 22, 2019 / WIL BALDWIN

SAN FRANCISCO (Reuters) – Tesla shares extended their recent sell-off on Wednesday after Citi cut its price target on the struggling electric car maker, leaving buyers of its recent share offer, including Chief Executive Elon Musk, $175 million in the hole.

Tesla’s stock dropped 5.5% to $193.88, on track to close below $200 for the first time since late 2016. It has lost a fifth of its value since the company sold a $1.84 billion convertible bond and almost $900 million of stock on May 2 to raise fresh capital and give it more time to stop losing money.

Citi analyst Itay Michaeli, who has a “sell” rating on Tesla, cut his price target to $191 from $238. He pointed to a an email Musk sent to employees last week, telling them he would increase cost-cutting, and that the $2.7 billion in recently raised capital would give Tesla just 10 months to break even at the rate it burned cash in the first quarter.

“The recent reported internal memo, which seemingly called into question prior guidance, didn’t help the risk/reward calculus. The implications can be serious, since an automaker’s balance sheet is always subject to the confidence ‘spiral’ risk,” Michaeli wrote in a client note.

Consumer Reports warned on Wednesday that a recent update to Tesla’s Autopilot driver assistance software does not work well and could be unsafe.

“It doesn’t appear to react to brake lights or turn signals, it can’t anticipate what other drivers will do, and as a result, you constantly have to be one step ahead of it,” Jake Fisher, Consumer Reports’ senior director of auto testing, said in a news release.

Tesla did not immediately respond to a request for comment. On April 22, Musk told investors that driverless Tesla “robotaxis” would be available in some U.S. markets next year, a claim met by skepticism by some self-driving experts.

UPPING HIS STAKE

Musk is battling to convince investors that demand remains high for the Model 3, the sedan targeted to propel Tesla to sustainable profit, and that it can be delivered efficiently and swiftly to customers around the world. Tesla lost $702 million in the first quarter and warned that profit would be delayed until the latter half of the year.

On Monday, Musk exercised options to buy 175,000 Tesla shares at $31.17 per share, increasing his indirect stake in the company to 34,102,560 shares, according to a filing. With Tesla’s stock down 41% year to date, Musk’s shares, including 102,880 he bought in this month’s capital raise, were worth $6.6 billion on Wednesday.

Tesla’s debt has stalled at lows hit earlier this week. Its recently issued convertible bond due in 2024 priced at 89.09 cents on the dollar, a record low. Its $1.8 billion junk bond traded at 82.5 cents on the dollar, slightly up from the all-time lows it hit on Monday and Tuesday.

The cost to insure Tesla’s debt, as measured by its credit default swap, edged up to roughly 28% of the face value of Tesla’s 2025 bond, from 27.6 % the day before.

(Reporting by Noel Randewich; additional reporting by Kate Duguid in New York and Vibhuti Sharma in Bengalaru; editing by Nick Zieminski and Jonathan Oatis)

Air New Zealand Picks Boeing for Wide-body Jet Order

May 20, 2019 / WIL BALDWIN

PARIS (Reuters) – Air New Zealand Ltd has decided to buy wide-body planes from Boeing Co, people with direct knowledge of the matter said, ending an 18 month battle between the U.S. aircraft maker and European rival Airbus SE.

The carrier has been considering replacing eight Boeing 777-200ER aircraft in a deal worth over $2 billion at list prices, though carriers typically receive steep discounts. Air New Zealand already uses Boeing wide-bodies exclusively on long-haul flights, and Airbus single-aisle jets on shorter routes.

The final choices under consideration were the Boeing 787 and Airbus A350, Air New Zealand Chief Financial Officer Jeff McDowall said in a video interview with the New Zealand Herald published on Saturday.

“They are both fantastic aircraft,” McDowall said. “Both produce a fantastic customer experience compared to the existing aircraft but also a lower cost and lower carbon emissions… We expect to make a decision soon, in the next month.”

Air New Zealand already operates 13 787-9 jets and has one more on order. The airline did not respond to a Reuters’ request for comment. It will hold an annual investor briefing on May 27.

Boeing and Airbus declined to comment. The people with direct knowledge of the matter declined to be identified ahead of a public announcement.

Air New Zealand’s chief executive, Christopher Luxon, last year told Reuters the larger Boeing 777X was also under consideration, and that the airline planned to use the new jets to begin longer routes such as Auckland to New York and Brazil.

In March, CFO McDowall in an analyst briefing said the airline would need fewer replacement jets in 2023 than initially anticipated due to changes in its flight network.

Air New Zealand began a two-year cost reduction program in March and deferred aircraft capital expenditure of about NZ$750 million ($490.1 million) as part of a business review.

A month earlier, it slashed domestic fares by as much as 50% in a shake-up of its pricing structure in response to a slackening travel market.

(Reporting by Tim Hepher in Paris; Additional reporting by Praveen Menon in WELLINGTON; Editing by Stephen Coates and Christopher Cushing)

FILE PHOTO: An Air New Zealand Airbus A320-200 plane takes off from Kingsford Smith International Airport in Sydney, Australia, February 22, 2018. REUTERS/Daniel Munoz/File Photo

Azul Says Rivals Blocked Carrier From Profitable Route

May 9, 2019 / WIL BALDWIN

SAO PAULO, May 9 (Reuters) – Brazilian airline Azul SA’s chief executive said on Thursday that its two larger competitors had barred the carrier from providing a competing air shuttle service on the highly profitable Sao Paulo to Rio de Janeiro route.

“Essentially what they did was they had a shutdown plan to keep us out,” CEO John Rodgerson told Reuters in an interview, referring to competitors Gol Linhas Aereas Inteligentes and LATAM Airlines Group.

The comments come weeks after Azul engineered a plan to break into the Sao Paulo-Rio de Janeiro route, by far the most transited in South America, but it fell apart after Gol and LATAM intervened.

The three airlines have been disputing the airport rights set to be left behind by their struggling competitor Avianca Brasil, which was scheduled to auction the routes this week as part of a bankruptcy process.

Azul, Brazil’s No. 3 airline, initially reached a deal with Avianca Brasil, but a few weeks later Gol and LATAM reached a different deal with Avianca Brasil’s key creditors, which was ultimately approved and sidelined Azul.

Both plans hinged on a successful Avianca Brasil bankruptcy auction, but the event was recently suspended indefinitely, meaning that even Gol and LATAM may not be able to get the airport rights they had agreed to buy.

“I don’t think they ever had the intention of closing on the deal,” Rodgerson said of Gol and LATAM’s agreement with Avianca Brasil.

Gol and LATAM have previously denied any anti-competitive stance.

Brazil’s antitrust regulator CADE said in April that it was concerned about a potential takeover by Brazil’s two major airlines, and that it preferred to see Azul or a new airline take over Avianca Brasil’s airport rights.

The rift also led Azul to leave Brazil’s airline industry group, known as ABEAR, late last month.

“I think the way they acted was inappropriate and not in the best interest of the industry,” Rodgerson said. “I don’t think we share the same values.”

Rodgerson gave the interview as part of Azul’s first quarter results announcement, in which higher operational costs weighed significantly, sending profits down 20% to 137.7 million reais ($35.06 million), despite significantly higher revenue compared to the same period last year.

While revenue grew 16% to 2.5 billion reais, personnel costs surged 37% amid continued expansion at the company, as well as the expiration of a payroll tax incentive.

“It’s kind of the new norm,” Rodgerson said.

Fuel costs also increased significantly, while other undisclosed costs jumped 34% to 224 million reais in the period.

Azul and its Brazilian competitors have faced higher costs in recent quarters due to the continued depreciation of the local currency, the real. While passengers buy their tickets in reais, many of the airline’s expenses, such as fuel, are denominated in the stronger U.S. dollar.

($1 = 3.9393 reais)

(Reporting by Marcelo Rochabrun; editing by Bernadette Baum and Bill Trott)

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