SAO PAULO, May 9 (Reuters) – Higher operational costs weighed on Brazil’s No. 3 airline, Azul SA, sending profits in the first quarter 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.
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.
Earlier this year, Azul signed a tentative deal that ultimately fell through to take over a set of coveted domestic routes that were to be auctioned off by its rival Avianca Brasil, which is going through a bankruptcy protection process.
The routes were then set to go to its two larger competitors, Gol Linhas Aereas Inteligentes and LATAM Airlines Group, dealing a blow to Azul as it had hoped to break into the lucrative Sao Paulo-Rio de Janeiro route.
That route is currently dominated by Gol and LATAM and is considered to be among the most profitable in the country.
At the last minute, a judge indefinitely suspended Avianca’s auction which was due earlier this week.
($1 = 3.9273 reais) (Reporting by Marcelo Rochabrun; Editing by Bernadette Baum)
NEW YORK–(BUSINESS WIRE) – JetBlue Airways Corporation (NASDAQ:JBLU) today reported its results for the first quarter 2019:
Reported diluted earnings per share of $0.14 in the first quarter of 2019 compared to $0.28 in the first quarter of 2018. Adjusted diluted earnings per share was $0.16 in the first quarter of 2019 versus $0.26 in the first quarter of 2018. Note A to this earnings release includes the GAAP to Non-GAAP reconciliation between reported and adjusted diluted earnings per share.
GAAP pre-tax income of $58 million, a decline of 48.5% from $113 million in the first quarter of 2018. Excluding the one-time costs, adjusted pre-tax income of $70 million(1), a decline of 38.2% from the first quarter of 2018.
Pre-tax margin of 3.1%, inclusive of the one-time costs, a 3.3 point decline from the first quarter of 2018. Adjusted pre-tax margin of 3.7%(1), a 2.7 percentage point decline year over year.
Highlights from the First Quarter 2019
First quarter 2019 revenue per available seat mile (RASM) declined 3.1%, year over year, driven by holiday calendar placement, improved completion factor and certain areas of softness observed in the trough period. Excluding the 0.75 point impact from high completion factor, RASM declined 2.4% year over year, slightly better than the mid-point of our guidance range of down (3.5%) to down (1.5%).
Operating expenses per available seat mile, excluding fuel (CASM ex-fuel) (1) increased 0.9%, below the low end of our initial guidance range of 1.5% to 3.5%. This increase includes a benefit of approximately 0.75 points from improved completion factor.
Key Guidance for the Second Quarter and Full Year 2019:
Capacity is expected to increase between 4.5% and 6.5% year over year in the second quarter 2019. For the full year 2019, JetBlue expects capacity to increase between 4.5% and 6.5%.
RASM growth is expected to range between 1.0% and 4.0% for the second quarter 2019 compared to the same period in 2018. Our guidance includes a benefit of 2.25 points of impact related to the calendar placement shift of Easter and Passover between the first and second quarters of 2019.
CASM ex-fuel is expected to increase between 1.5% and 3.5% for the second quarter of 2019, principally driven by engine maintenance timing and the year-over-year impact of the pilot contract effective on August 1st, 2018. For the full year 2019, JetBlue continues to expect year over year CASM ex-fuel to be between flat and 2.0%.
For further details see the latest Investor Update and the First Quarter 2019 Earnings Presentation available via the internet at http://investor.jetblue.com.
JetBlue will conduct a conference call to discuss its quarterly earnings today, April 23, 2019 at 10:00 a.m. Eastern Time. A live broadcast of the conference call will also be available via the internet at http://investor.jetblue.com.
Executing our Plan to Reach our EPS Commitments “We are very proud of our team and the work they do every day to deliver the JetBlue experience. This quarter our financial performance was mainly impacted by the calendar placement of Easter and Passover holidays and, as disclosed in March, a softer revenue environment than initially expected,” said Robin Hayes, JetBlue’s Chief Executive Officer.
“In recent years we have repeatedly demonstrated our ability to adapt to the changing environment around us to achieve our margin commitments – and 2019 is proving to be no different. We believe we will successfully execute our five ‘building blocks’ introduced at our 2018 Investor Day, and we remain committed to our goal of delivering earnings per share between $2.50 and $3 dollars by 2020. We also continue to expect margin expansion in 2019, and to further expand our margins in 2020.”
“We believe our work will position us for success into the next decade. Next year we anticipate the first delivery of our margin-accretive A220s, a game-changing aircraft to further help us reduce our unit costs, improve our margins and increase our EPS. We are thrilled that we recently converted 13 A321s in our order book to A321 LRs, and we expect to begin our European service by adding London from Boston and New York starting in 2021,” said Joanna Geraghty, JetBlue’s President and Chief Operating Officer.
Revenue Performance and Outlook
First quarter RASM declined 3.1% year over year. Excluding the 0.75 point headwind from improved completion factor, RASM was slightly better than the mid-point of our guidance range of down (3.5%) to down (1.5%). “Our RASM was negatively impacted by three drivers: this year’s holiday calendar placement, improved completion factor, and certain areas of softness we observed in the trough period,” said Marty St. George, JetBlue’s EVP Commercial and Planning.
“Looking into the second quarter, we expect RASM growth between 1.0% and 4.0% year over year. Our guidance includes an anticipated 2.25 point positive impact of Easter/Passover holiday placement shift into April. March RASM showed clear signs of a weaker trough, which extended into the first half of April. The April peak, however, is showing the strength we had expected, and very early look at May and June points to sequential RASM acceleration.”
Cost Performance, Outlook and Balance Sheet
“Our first quarter CASM ex-fuel represents a unit cost increase below the mid-point of our guidance range. For the second quarter, we expect CASM ex-fuel growth to range between 1.5% and 3.5%. As a reminder, both our first quarter and second quarter guidance include an approximately three-point impact from our pilot contract signed last August,” said Steve Priest, JetBlue’s EVP Chief Financial Officer.
“We could not be prouder of the hard work across JetBlue to deliver on our commitments to hit our goals. We are encouraged by the CASM ex-fuel progress we made in the first quarter, and the progression we anticipate for the rest of the year. In the first half we will continue to digest our first pilot contract, and despite our capacity reduction from early March, our guidance range remains between 0 and 2 percent.”
Capital Allocation and Liquidity
JetBlue ended the quarter with approximately $876 million in unrestricted cash, cash equivalents, and short term investments, or about 11.3% of trailing twelve month revenue. In addition, at the end of the quarter, JetBlue maintained approximately $625 million in undrawn lines of credit. JetBlue repaid $133 million in regularly scheduled debt and capital lease obligations for the first quarter.
Fuel Expense and Hedging
The realized fuel price in the quarter was $2.05 per gallon, a 2.0% decline versus first quarter 2018 realized fuel price of $2.09.
JetBlue entered into forward fuel derivative contracts to hedge approximately 7% of its fuel consumption for the second quarter of 2019. Based on the fuel curve as of April 12th, JetBlue expects an average all-in price per gallon of fuel of $2.21 in the second quarter of 2019.
About JetBlue
JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles (Long Beach), Orlando, and San Juan. JetBlue carries more than 42 million customers a year to 100+ cities in the U.S., Caribbean, and Latin America with an average of more than 1,000 daily flights. For more information please visit jetblue.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which represent our management’s beliefs and assumptions concerning future events. When used in this document and in documents incorporated herein by reference, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; our significant fixed obligations and substantial indebtedness; volatility in fuel prices, maintenance costs and interest rates; our reliance on high daily aircraft utilization; our ability to implement our growth strategy; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on a limited number of suppliers; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional domestic or foreign government regulation; changes in our industry due to other airlines’ financial condition; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; the spread of infectious diseases; adverse weather conditions or natural disasters; and external geopolitical events and conditions. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change prior to the end of each quarter or year.
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this press release, could cause our results to differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, in addition to others not described in this press release, those described in Item 1A of our 2018 Form 10-K under “Risks Related to JetBlue” and “Risks Associated with the Airline Industry”. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur.
FILE PHOTO: A United Express Embraer ERJ-175LR airplane is pictured at Vancouver’s international airport in Richmond, British Columbia, Canada, February 5, 2019. REUTERS/Ben Nelms
(Reuters) – United Airlines on Tuesday reported a better-than-expected jump in first-quarter profit as it sold more tickets and cut costs, standing by its 2019 profit target even as its Boeing Co 737 MAX jets remain grounded.
Chicago-based United has removed its 14 MAX aircraft, which were suspended worldwide in March following two fatal crashes, from its flying schedule through early July, eating into U.S. airlines’ peak summer travel season.
Still, the airline’s parent United Continental Holdings Inc reiterated its estimate for adjusted earnings of $10 to $12 per share in 2019, and said its strategy for scheduling more flights out of its hubs was continuing to win customers.
Adjusted earnings per share rose to $1.15 in the first quarter, ending March 31, from 49 cents a year earlier, overcoming a U.S. government shutdown and severe winter weather earlier this year that curtailed flights.
Wall Street analysts on average had forecast 95 cents per share, according to IBES data from Refinitiv.
Its shares rose 2.8 percent in after-hours trading.
United has largely avoided cancelling MAX flights by servicing those routes with larger aircraft, but President Scott Kirby warned last week that the strategy could not last indefinitely.
The airline, which has been adding seats at a faster pace than rivals, trimmed its 2019 capacity growth target to between 4 percent and 5 percent from 4 percent to 6 percent previously, but did not say whether the decision reflected the effect of the grounded MAX.
Total operating revenue rose 7.1 percent to $8.73 billion in the quarter, while closely watched revenue per available seat mile rose 1.1 percent.
In the second quarter, United said it expects unit revenue to rise between 0.5 percent and 2.5 percent while unit costs, which fell 1.8 percent in the first quarter, were expected to be flat to 1 percent higher.
The No. 3 U.S. carrier is the first of three U.S. 737 MAX operators to report first-quarter results. Southwest Airlines Co and American Airlines Group Inc, which have removed their MAX jets from schedules into August, report on April 25 and April 26 respectively.
A Federal Aviation Administration review board said on Tuesday that it found a Boeing software update for the MAX to be “operationally suitable,” suggesting the lengthy regulatory process to get the planes back in the air was underway.
Rival Delta Air Lines Inc, which does not operate the 737 MAX, lifted its 2019 revenue forecast last week after reporting better-than-expected quarterly profit.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Sanjana Shivdas in Bengaluru; Editing by Bill Rigby)
(Reuters)
– Virgin Atlantic on Wednesday reported an annual pretax loss for the
second consecutive year, hit by a shaky economy, the higher costs of
fuel generated by a weaker British pound and problems with Rolls Royce’s
Trent engines.
The
airline, the 1980s brainchild of British billionaire Richard Branson,
fell back into the red in 2017 after three years of profits, as
competition intensified and the weakening of the pound added to already
rising fuel costs.
Best
known in Europe for the trans-Atlantic planes it flies with Air
France-KLM and Delta, Virgin said its loss before tax and exceptional
items was 26.1 million pounds ($34.12 million) for the year ended Dec.
31, compared to a loss of 49 million pounds in 2017.
Total
revenue rose 5.8 percent to 2.78 billion pounds, as passenger numbers
grew just under 5 percent to 5.4 million and revenue per customer rose
1.7 percent.
The
company said performance had suffered from economic uncertainty and the
weaker pound – which increases costs because fuel is priced in dollars –
as well as the well-documented problems of the Trent 1000 engines used
on its Boeing 787 jets.
“While
a loss is disappointing, our performance has improved in 2018 despite
challenging economic conditions and put us on a trajectory for growth
and return to profitability,” Chief Executive Officer Shai Weiss said in
a statement.
Rolls-Royce
on Wednesday agreed to an early inspection of some Trent 1000 TEN
engines by regulatory authorities, a week after Singapore Airlines
grounded two Boeing 787-10 jets fitted with the units.
British
Airways owner IAG in February chose Boeing 777-9s, rather than a
competing package from Airbus in part powered by Rolls, underlining the
risks to airlines from the engine issues.
Since
then the industry has been thrown into chaos by the grounding of
Boeing’s new 737 MAX planes after a second fatal crash within six
months.
The
pound fell 5.6 percent against the U.S. dollar, in 2018 as Britain
contended with the political and economic uncertainty generated by its
negotiations on leaving the European Union.
Finance
chief Tom Mackay said that while economic factors would continue to
challenge the carrier in the year ahead, Virgin Atlantic was in a strong
cash position.
The
results are the company’s first since its acquisition of troubled
regional airline Flybe for $2.8 million earlier this year, in a joint
bid with Stobart Group and Cyrus Capital.
($1 = 0.7649 pounds)
(Reporting by Noor Zainab Hussain and Pushkala Aripaka in Bengaluru; Editing by Anil D’Silva)
Toronto, March 29, 2019 – Bombardier
Commercial Aircraft announced today that a customer, who has requested
to remain unidentified at this time, has signed an order to acquire six
new Q400 aircraft.
Based on the list price of the Q400 aircraft, the firm order is valued at approximately US$ 202 million.
“The Q400 aircraft offers the perfect balance of passenger comfort
and operating economics while maintaining its unmatched range and speed
advantage versus other turboprops,” said Fred Cromer, President,
Bombardier Commercial Aircraft. “The demand for turboprop aircraft
worldwide is tremendous and the Q Series aircraft are ideally positioned
to meet the needs of regional airlines as they offer a unique ability
to serve diverse and challenging environments. The Q400 offers the
lowest seat costs amongst turboprops, with an enhanced passenger
experience and a proven 99.5 per cent reliability.”
About Bombardier
With over 68,000 employees across
four business segments, Bombardier is a global leader in the
transportation industry, creating innovative and game-changing planes
and trains. Our products and services provide world-class transportation
experiences that set new standards in passenger comfort, energy
efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
FILE
PHOTO: Bikes by a bike rental service of Icelandic airline WOW air are
seen in Reykjavik, Iceland, August 5, 2017. REUTERS/Michaela Rehle/File
Photo
(Reuters)
– Iceland’s WOW air became the latest budget airline casualty on
Thursday, halting operations and cancelling all future flights after
efforts to raise more funds failed.
WOW,
which focussed on low-cost travel across the Atlantic, advised stranded
travellers to seek flights with other airlines. It flew a total of 3.5
million passengers last year.
“This
is probably the hardest thing I have ever done but the reality is that
we have run out of time and have unfortunately not been able to secure
the funding of the company,” WOW CEO and founder Skuli Mogensen wrote in
a letter to the company’s 1,000 employees.
“I will never be able to forgive myself for not taking action sooner,” he added.
WOW
had earlier postponed flights on Thursday as it entered what it had
hoped were the final stages of an equity raising with a group of
investors.
“My
flight from Boston has been cancelled. Having a hard time getting
through to anyone on the phone. Can you help me at all?” Twitter user
Marc Solari wrote.
WOW replied with an apology and offer of further assistance.
WOW
is the latest budget airline to collapse as the European airline sector
grapples with over-capacity and high fuel costs. Recent failures
include Britain’s Flybmi, Nordic budget airline Primera Air and Cypriot
counterpart Cobalt.
“RESCUE FARES”
Other
airlines including, Icelandair, Easyjet and Norwegian stepped in
offering discounted ‘rescue fares’ to stranded passengers, according to
the Icelandic Transport Authority
WOW has been pursuing different avenues to raise money over the past few months.
It
ended talks with rival Icelandair last Sunday while veteran low-cost
airline investor Bill Franke also had cancelled a proposed investment
through private equity fund Indigo Partners.
Icelandair shares traded up 13 percent percent at 1215 GMT after the failure of a competitor.
Founded
in 2011 by entrepreneur Mogensen, WOW used smaller single-aisle planes
to fly between Iceland and many destinations in the United States and
Europe.
Its
website had advertised flights from London to cities such as New York
and Boston for as little as 150 pounds, although the journey went via
the Icelandic capital Reykjavik.
Norwegian
Air has a little over half of the market share in the fast-growing,
low-cost, long-haul transatlantic market, while WOW controlled a quarter
in 2018.
There are fears of a knock-on effect on Iceland’s important tourism industry.
Around
30 percent of tourists visiting Iceland last year flew with WOW and the
collapse could trigger a 16 percent drop in tourists this year,
research from Icelandic bank Arion showed.
( By Stine Jacobsen and Tommy Lund; editing by Darren Schuettler/Keith Weir)
Barcelona, Spain – December 06, 2018: WOW Air Airbus A321 approaching to El Prat Airport in Barcelona, Spain.
NEW DELHI/BENGALURU (Reuters) – India’s SpiceJet Ltd could benefit from cash-strapped Jet Airways being forced to ground planes, and the low-cost carrier is in talks with lessors to lease some of those aircraft, a person with direct knowledge of the matter told Reuters.
Shares of SpiceJet rose as much as 7.2 percent on Wednesday in their biggest percentage gain since Dec. 18 as investors bet the airline could take advantage of Jet Airways’ woes.
SpiceJet last week was forced to ground its 12 Boeing Co 737 MAX 8 planes by India’s aviation watchdog, following safety concerns after the Ethiopian Airlines plane crash that killed 157 people.
SpiceJet and Jet Airways are the only carriers in India that operate this type of aircraft and have a total of about 400 on order. The airlines also operate the previous model, the 737-800 among other Boeing planes.
The 737-800 makes up the majority of the Jet Airways fleet, and the airline is now operating only 41 aircraft, the Directorate General of Civil Aviation (DGCA) said on Tuesday.
That means around two-thirds of its fleet is grounded for non-payment to lessors, maintenance or other reasons.
“Lessors are panicking as they haven’t been paid and if Jet goes for insolvency, their planes will be stuck in India, so many of them are chasing SpiceJet,” said the person quoted earlier.
The person said SpiceJet needs at least twelve 737s to cover the grounded MAX planes and it is negotiating for more. Jet Airways pilots are also queuing up to join the budget airline.
Jet Airways’ lessors have offered 50 aircraft to SpiceJet, according to a report by news wire IANS.
SpiceJet and Jet Airways did not immediately respond to a request for comment.
Jet Airways shares dropped about 7 percent on Wednesday as its financial crisis deepened, with the Indian government calling for an emergency meeting and pilots threatening to go on strike over unpaid salaries.
The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy, two people within the administration have told Reuters, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election.
The 25-year-old airline has defaulted on loans after racking up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors – some of whom have started terminating their lease deals with the carrier.
This has forced Jet Airways to cancel hundreds of flights, leaving passengers stranded and angry. The number of Jet Airways flights has fallen by 80 percent from a year ago, according to the DGCA.
(By Aditi Shah and Tanvi Mehta, Additional reporting by Arnab Paul in Bengaluru, Editing by Sherry Jacob-Phillips and Shreejay Sinha)
FILE PHOTO: A Jet Airways passenger aircraft takes off from the airport in Ahmedabad, August 12, 2013. REUTERS/Amit Dave/File Photo
ROME
(Reuters) – Delta Air Lines and easyJet have set strict conditions for
investing in Alitalia that could jeopardise a government-led plan to
rescue the troubled Italian airline, a source close to the matter said.
Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans.
Italy’s
populist government, which has made the re-launch of the flagship
carrier one of its priorities, is sponsoring a plan that would see
state-owned railway Ferrovie inject fresh funds and revamp the carrier
together with industrial partners.
Delta
and easyJet, which have expressed interest in Alitalia, are in talks
with Ferrovie, but the three investors do not see eye to eye on the
structure of the deal.
Without
an industrial partner fully on board, Alitalia could soon find itself
in trouble since neither Ferrovie nor the state have the skills to run
the carrier, the source said.
EasyJet
has said several times it is interested in Alitalia’s short-haul
operations and positions at primary airports, adding the alliance should
be commercially viable.
The
British low-cost carrier would be open to taking a stake of 15 percent
in the Italian airline but only if it wins control of certain Alitalia
assets, the source said.
That
condition has irritated the three special commissioners in charge of
the airline, who fear it could lead to a break-up of the company. The
administrators have the power to decide on the offers.
At
the same time Delta is also planning to take a 15 percent stake,
spending around 100 million euros in the proposed 900 million euro
(773.6 million pounds) rescue plan, but does not want to inject more
than that, the source said.
A
participation of 30 percent or less by the industrial partners,
compared with a stake of around 40 percent Ferrovie was counting on,
would force the government to find additional investors, probably among
state-controlled companies, a second source said.
Ferrovie
is expected to take a stake of between 30 and 49 percent in the new
carrier, the second source said, making a full involvement of Delta and
easyJet crucial.
According
to Italian newspaper Il Messaggero, Ferrovie CEO Gianfranco Battisti
will fly to Atlanta in the coming days to try to convince Delta’s CEO Ed
Bastian to pump more money into the rescue plan.
Ferrovie, easyJet declined to comment on the issue, while Delta was not immediately available for comment.
Ferrovie
is racing against the clock to meet a March 31 deadline set by the
Italian government to present a rescue plan for Alitalia.
Should
that deadline be missed, it would jeopardise the repayment of 900
million euro state loan to the airline, which must take place by the end
of June.
(By Giselda Vagnoni. Additional reporting by Francesca Landini in Milan, Alistair Smout in London, Tracy Rucinski in Chicago, Writing by Francesca Landini; Editing by Keith Weir)
BERLIN
(Reuters) – Lufthansa has ordered 20 Boeing 787-9 and 20 additional
Airbus A350-900 long-haul planes to replace its older four-engine
aircraft as it seeks to boost the fuel efficiency of its fleet, the
airlines group said on Wednesday.
The
German company said it has also agreed to sell six of its 14 Airbus
A380 planes back to Airbus in 2022/2023 for economic reasons.
Airbus
said last month it would scrap production of the A380 superjumbo from
2021 following lacklustre sales. The decision reflected a dearth of
orders as airline bosses shied away from bulky, larger planes that are
harder to fill.
Qatar airways said last week it would phase out its A380 planes from 2024.
Lufthansa
said the new aircraft will be delivered between late 2022 and 2027. It
did not disclose how much it had paid for the planes which have a
list-price investment volume of $12 billion (9.1 billion pounds), but
said it had negotiated a significant price cut.
“In
addition to the cost-effectiveness of the A350 and B787, the
significantly lower CO2 emissions of this new generation of long-haul
aircraft was also a decisive factor in our investment decision,” Chief
Executive Carsten Spohr said in a statement.
Lufthansa
currently operates a long-haul fleet of 199 aircraft. It said the new,
more economical aircraft will lower its operating cost compared to
earlier models by around 20 percent.
The
airline will also seek to reduce the complexity of its fleet over the
next few years by taking seven aircraft types out of service to help
reduce maintenance costs and the supply of replacement parts.
(Reporting by Caroline Copley; editing by Thomas Seythal and Michelle Martin)
* Jet Airways says 28 planes grounded for non-payment of dues
* Lenders, Etihad yet to approve restructure (Adds graphic)
SINGAPORE,
March 8 (Reuters) – FLY Leasing Ltd has grounded three planes on lease
to India’s Jet Airways Ltd and will take them back and redeploy them
elsewhere if the airline cannot gain approvals for a restructuring plan
this month, the lessor’s CEO said.
Jet
Airways on Thursday said another three aircraft had been grounded due
to its failure to make payments, taking the total number to 28, but it
has not specified the lessors involved.
The
grounding of nearly one-quarter of the airline’s fleet has led to the
cancellation of hundreds of flights and complaints from customers on
social media.
Several
major global aircraft leasing companies, including AerCap Holdings NV
and BOC Aviation have exposure to the financially troubled airline,
which has defaulted on loans and has not paid pilots, leasing firms and
suppliers for months.
“We
have grounded our aircraft, we have control over our aircraft, but we
have not terminated the leases and we are waiting for the airline to
approve all its restructuring with the State Bank of India,” FLY Leasing
CEO Colm Barrington told analysts on a results call on Thursday.
“If
that goes through at the end of the month, obviously, we will stay with
Jet. If they can’t get that done, then we’ll take our aircraft back and
redeploy.”
The
airline had three relatively young Boeing Co 737-800s on lease to Jet
Airways, which accounted for around 3 percent of FLY Leasing’s revenue,
he said.
Jet
Airways has outlined a draft to sell a majority stake to a consortium
led by the State Bank of India at 1 rupee, under regulations that permit
banks to convert debt to equity in a defaulting firm.
The
stake sale will be followed by an equity raising, debt restructuring
and the sale and leaseback of jets to help plug a $1.2 billion funding
gap, but the plan needs approvals from several stakeholders, including
major shareholder Etihad Airways.
(Reporting by Jamie Freed in Singapore; Additional reporting by Chandini Monnappa in Bengaluru; Editing by Stephen Coates)
