The COVID-19 pandemic had a significant impact on KiwiRail’s bottom line for the past financial year, but rigorous operational changes and cost savings measures have helped stabilise the business, KiwiRail chairman Brian Corban says.
KiwiRail Holdings Limited, New Zealand’s national rail provider, which also operates the Interislander ferry service across Cook Strait, today reported an operating surplus of $40 million1in FY20 for the KiwiRail Group, down $15 million compared with FY192.
FY20 was also notable for the additional $1.2 billion of Crown funding allocated in Budget 2020, including $400 million to progress the iReX project to replace the three ageing Interislander ferries with two brand new ones. When they arrive, they will be the first new purpose-built ferries in Interislander’s fleet for 25 years. The Budget 2020 allocation also allows the purchase of new locomotives.
Mr Miller explains that COVID-19 interrupted progress on some significant projects including the rejuvenation of the North Auckland Line where $35.5 million of $164.5 million allocated by the Provincial Growth Fund was spent during the year. More than 400 staff, contractors and sub-contractors are at work building tracks, replacing bridges and making tunnels suitable for wagons carrying hi-cube containers in Northland.
Other highlights during the year included the full return to service of the Main North line through Kaikōura and, in Wellington, work advanced on upgrading the metro network including construction starting on a second 2.7km track between Trentham and Upper Hutt.
1 Operating surplus represents earnings before depreciation & amortisation, interest, impairment, capital grants and fair value changes.
2 FY19 Operating surplus of $55m excludes impact of non-recurring items ($29m Holidays Act remediation).
Embraer and EDP, a company that operates in all segments of the Brazilian energy sector, have signed a partnership for electric aircraft research. Through its EDP Smart division, the Portuguese-based multinational announced a financial contribution for the acquisition of energy storage and battery charging technologies for Embraer’s all-electric demonstrator aircraft project, utilizing the EMB-203 Ipanema as its test bed. The prototype, which is already in development, is scheduled to complete its inaugural flight in 2021.
The investment is part of the cooperation agreement signed by both companies to advance their shared knowledge of energy storage and battery charging technologies for aviation – one of the main challenges of the project. The partnership aims to investigate the applicability of high voltage batteries for the electric propulsion systems of small aircraft, in addition to evaluating the main operating characteristics, such as weight, efficiency and power quality, thermal control and management, cycling loading and unloading, and operational safety.
EDP Headquarters in Portugal
Technological Cooperation
This proposal for the technological development of aeronautical electrification was initially created as a cooperation between Embraer and WEG, in May 2019. The project was developed as an effective and efficient instrument for training and for the maturation of technologies prior to their application in future products.
The scope of the partnership with EDP is to develop shared research in the storage of high voltage energy, complementing Embraer’s ongoing research. These research and development initiatives seek to accelerate the combined knowledge of the technologies necessary for the use and integration of batteries and electric motors in order to increase the energy efficiency of the propulsion systems of aircraft.
For the evaluations, a small single-engine aircraft is being used as the test bed to perform a primary assessment of electrification technologies. Ground tests have taken place at Embraer’s facilities in Botucatu, in the interior of São Paulo, in preparation for the first flight, which will take place at Embraer’s Gavião Peixoto unit.
Electrification is just one project in a series of initiatives being developed by Embraer and the entire aeronautical industry aimed at ensuring a commitment to environmental sustainability, as already exemplified by biofuel developments to reduce carbon emissions.
EDP has a global commitment to electrify 100% of its fleet by 2030, as well as to develop new offers and commercial solutions that promote the energy transition. Last year, during Aneel’s Public Call on the topic of Efficient Electric Mobility, the Company approved an investment of about R$ 50 million in projects, via a Research and Development Fund consisting of both corporate and partner resources.
– Financial results continue to be significantly impacted by COVID-19 and the 737 MAX grounding
– Proactively managing liquidity and transforming for the future
– Revenue of $14.1 billion, GAAP loss per share of ($0.79) and core (non-GAAP)* loss per share of ($1.39)
– Operating cash flow of ($4.8) billion; cash and marketable securities of $27.1 billion
– Total backlog of $393 billion, including more than 4,300 commercial airplanes
Table 1. Summary Financial Results
Third Quarter
Nine Months
(Dollars in Millions, except per share data)
2020
2019
Change
2020
2019
Change
Revenues
$14,139
$19,980
(29)%
$42,854
$58,648
(27)%
GAAP
(Loss)/Earnings From Operations
($401)
$1,259
NM
($4,718)
$229
NM
Operating Margin
(2.8)%
6.3%
NM
(11.0)%
0.4%
NM
Net (Loss)/Earnings
($466)
$1,167
NM
($3,502)
$374
NM
(Loss)/Earnings Per Share
($0.79)
$2.05
NM
($6.10)
$0.66
NM
Operating Cash Flow
($4,819)
($2,424)
NM
($14,401)
($226)
NM
Non-GAAP*
Core Operating (Loss)/Earnings
($754)
$895
NM
($5,773)
($864)
NM
Core Operating Margin
(5.3)%
4.5%
NM
(13.5)%
(1.5)%
NM
Core (Loss)/Earnings Per Share
($1.39)
$1.45
NM
($7.88)
($1.13)
NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.”
The Boeing Company [NYSE: BA] reported third-quarter revenue of $14.1 billion, GAAP loss per share of ($0.79) and core loss per share (non-GAAP)* of ($1.39), reflecting lower commercial deliveries and services volume primarily due to COVID-19 (Table 1). Boeing recorded operating cash flow of ($4.8) billion.
“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” said Boeing President and Chief Executive Officer Dave Calhoun. “Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic. We remain focused on the health and safety of our employees and their communities. I’m proud of the dedication and commitment our teams have demonstrated as they continued to deliver for our customers in this challenging environment. Despite the near-term headwinds, we remain confident in our long term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust.”
Following the lead of global regulators, Boeing made steady progress toward the safe return to service of the 737 MAX, including rigorous certification and validation flights conducted by the U.S. Federal Aviation Administration, Transport Canada and the European Union Aviation Safety Agency. The Joint Operational Evaluation Board, featuring civil aviation authorities from the United States, Canada, Brazil, and the European Union, also conducted its evaluations of updated crew training. The 737 MAX has now completed around 1,400 test and check flights and more than 3,000 flight hours as it progresses through the robust and comprehensive certification process.
To adapt to the market impacts of COVID-19 and position the company for the future, Boeing continued its business transformation across five key areas including its infrastructure footprint, overhead and organizational structure, portfolio and investment mix, supply chain health and operational excellence. As the company resizes its operations to align with market realities, Boeing expects to continue lowering overall staffing levels through natural attrition as well as voluntary and involuntary workforce reductions, and recorded additional severance costs in the third quarter.
Table 2. Cash Flow
Third Quarter
Nine Months
(Millions)
2020
2019
2020
2019
Operating Cash Flow
($4,819)
($2,424)
($14,401)
($226)
Less Additions to Property, Plant & Equipment
($262)
($465)
($1,038)
($1,387)
Free Cash Flow*
($5,081)
($2,889)
($15,439)
($1,613)
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.”
Operating cash flow was ($4.8) billion in the quarter, reflecting lower commercial deliveries and services volume primarily due to COVID-19, as well as timing of receipts and expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-End
(Billions)
Q3 20
Q2 20
Cash
$10.6
$20.0
Marketable Securities1
$16.5
$12.4
Total
$27.1
$32.4
Debt Balances:
The Boeing Company, net of intercompany loans to BCC
$59.1
$59.5
Boeing Capital, including intercompany loans
$1.9
$1.9
Total Consolidated Debt
$61.0
$61.4
1Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”
Cash and investments in marketable securities decreased to $27.1 billion, compared to $32.4 billion at the beginning of the quarter, primarily driven by operating cash outflows (Table 3). Debt was $61.0 billion, down from $61.4 billion at the beginning of the quarter due to the repayment of maturing debt.
Total company backlog at quarter-end was $393 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes
Third Quarter
Nine Months
(Dollars in Millions)
2020
2019
Change
2020
2019
Change
Commercial Airplanes Deliveries
28
62
(55)%
98
301
(67)%
Revenues
$3,596
$8,249
(56)%
$11,434
$24,793
(54)%
Loss from Operations
($1,369)
($40)
NM
($6,199)
($3,813)
NM
Operating Margin
(38.1)%
(0.5)%
NM
(54.2)%
(15.4)%
NM
Commercial Airplanes third-quarter revenue decreased to $3.6 billion, reflecting lower delivery volume primarily due to COVID-19 impacts as well as 787 quality issues and associated rework. Third-quarter operating margin decreased to (38.1) percent, primarily driven by lower delivery volume, as well as $590 million of abnormal production costs related to the 737 program.
Commercial Airplanes added the final 777X flight test airplane to the test program and the GE9X engine received FAA certification. In October, the company decided it will consolidate 787 production in South Carolina in mid-2021, which did not have a significant financial impact on the program in the third quarter. Commercial Airplanes delivered 28 airplanes during the quarter, and backlog included over 4,300 airplanes valued at $313 billion.
Defense, Space & Security
Table 5. Defense, Space & Security
Third Quarter
Nine Months
(Dollars in Millions)
2020
2019
Change
2020
2019
Change
Revenues
$6,848
$7,002
(2)%
$19,478
$20,168
(3)%
Earnings from Operations
$628
$754
(17)%
$1,037
$2,581
(60)%
Operating Margin
9.2%
10.8%
(1.6) Pts
5.3%
12.8%
(7.5) Pts
Defense, Space & Security third-quarter revenue decreased to $6.8 billion, primarily due to derivative aircraft award timing, partially offset by higher fighter volume (Table 5). Third-quarter operating margin decreased to 9.2 percent reflecting less favorable performance, including a $67 million KC-46A Tanker charge.
During the quarter, Defense, Space & Security received an award for eight F-15EX advanced fighter aircraft for the U.S. Air Force and a contract extension for the International Space Station for NASA, as well as contracts for nine additional MH-47G Block II Chinook helicopters for the U.S. Army Special Operations and four additional 702X satellites. Also in the quarter, the U.S. Air Force and Boeing team was awarded the Collier Trophy for aerospace excellence for the X-37B autonomous spaceplane. Significant milestones included inducting the 20th U.S. Navy F/A-18 into the Service Life Modification program as well as delivering the firstBell Boeing V-22 Osprey to Japan and the first MH-47G Block II Chinook to the U.S. Army Special Operations.
Backlog at Defense, Space & Security was $62 billion, of which 30 percent represents orders from customers outside the U.S.
Global Services
Table 6. Global Services
Third Quarter
Nine Months
(Dollars in Millions)
2020
2019
Change
2020
2019
Change
Revenues
$3,694
$4,658
(21)%
$11,810
$13,820
(15)%
Earnings from Operations
$271
$673
(60)%
$307
$2,013
(85%)
Operating Margin
7.3%
14.4%
(7.1) Pts
2.6%
14.6%
(12.0) Pts
Global Services third-quarter revenue decreased to $3.7 billion, driven by lower commercial services volume due to COVID-19, partially offset by higher government services volume (Table 6). Third-quarter operating margin decreased to 7.3 percent primarily due to lower commercial services volume and additional severance costs.
During the quarter, Global Services signed an agreement with GECAS for 11 737-800 Boeing Converted Freighters, secured a six-year P-8A support contract for the Royal Australian Air Force, and was awarded F-15EX training and services support contracts by the U.S. Air Force. Global Services also delivered the first P-8A Operational Flight Trainer for the United Kingdom Royal Air Force.
Additional Financial Information
Table 7. Additional Financial Information
Third Quarter
Nine Months
(Dollars in Millions)
2020
2019
2020
2019
Revenues
Boeing Capital
$71
$66
$205
$207
Unallocated items, eliminations and other
($70)
$5
($73)
($340)
Earnings from Operations
Boeing Capital
$30
$29
$47
$86
FAS/CAS service cost adjustment
$353
$364
$1,055
$1,093
Other unallocated items and eliminations
($314)
($521)
($965)
($1,731)
Other income, net
$119
$121
$325
$334
Interest and debt expense
($643)
($203)
($1,458)
($480)
Effective tax rate
49.6%
0.8%
40.1%
(350.6)%
At quarter-end, Boeing Capital’s net portfolio balance was $2.0 billion. The change in revenue and earnings from other unallocated items and eliminations was primarily due to the timing of cost allocations. Earnings from other unallocated items and eliminations was also impacted by lower enterprise research and development expense. Interest and debt expense increased due to higher debt balances. The third quarter effective tax rate reflects tax benefits related to the five year net operating loss carryback provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the impact of pre-tax losses.
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 12-13.
Free Cash Flow
Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.
Caution Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the COVID-19 pandemic and related government actions, including with respect to our operations, our liquidity, the health of our customers and suppliers, and future demand for our products and services; (2) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers, (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels and acquisition priorities of the U.S. government; (7) our dependence on U.S. government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non-U.S. operations, including sales to non-U.S. customers; (15) threats to the security of our or our customers’ information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft concentration in our customer financing portfolio; (18) changes in our ability to obtain debt financing on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; and (24) potential environmental liabilities.
Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
A pilot walks by United Airlines planes at the San Francisco International Airport in April. GETTY IMAGES
United Airlines Holdings Inc. stock (Nasdaq: UAL) fell late Wednesday after the airline reported a 78% drop in quarterly sales as the pandemic continued to crimp air travel.
United said it lost $1.8 billion, or $6.33 a share, in the third quarter, contrasting with earnings of $1 billion, or $3.99 a share, in the year-ago quarter.
– Loyalty programme’s strong and active global membership has been built on continuous innovation and value-driven initiatives for members
Emirates Skywards, the award-winning loyalty programme of Emirates and flydubai, has marked 20 years of excellence, innovation and unmatched rewards. Over the past two decades, the loyalty programme has continued to grow its membership base by offering value and rich, personalised experiences to its members around the world.
The programme has continually invested to diversify its brand partnerships, and utilise innovative digital technology, so that it can offer its members across the globe with more ways to earn and enjoy rewards, conveniently and via new touchpoints.
From a million members in 2005, to 27 million members in 2020
The loyalty programme has 27 million members worldwide, of which, more than 32,000 are founding members who joined the programme in 2000 and are still active. In celebration of its 20th anniversary, Emirates Skywards is offering members double Tier Miles on any flight booked by 10 December, for travel until 31 March 2021,* while founding members can earn double Tier Miles and double Skywards Miles on any flight booked by 10 December, for travel until 31 August 2021*
Emirates Skywards members come from more than 180 countries, including: 3.5 million members in the United Kingdom, 2.7 million in the United States, 2 million in Australia, 1.9 million in India, and 1.9 million in the United Arab Emirates.
Offering more flexibility, choice, and ways to earn on the ground
Emirates Skywards has expanded its range of partners over the past 20 years to create new, exciting and exceptional value offerings for its diverse membership base. The loyalty programme currently has nearly 200 partners, including: 16 airline partners; more than 100 hotel partners; 33 financial partners, 22 retail and lifestyle partners, 7 car rental partners.
Earlier this year, the loyalty programme launched skywardsmilesmall.com – introducing over a thousand new ways to earn Miles while shopping online with popular UK and US brands. Expanding its financial partnerships, the loyalty programme has launched the Emirates Skywards Mastercard® in partnership with Barclays – its first Emirates branded credit card in the U.S allowing customers to accumulate even more Skywards Miles on their everyday spend and travel purchases.
‘My Family’ programme, which launched in 2018, has enhanced its features to now accept family members pooling up to 100% of all Skywards Miles earned, not just on Emirates flights – allowing customers to redeem rewards even faster than before.
Members can also earn thousands of Miles with Emirates Skywards Hotels at over 400,000 hotels, in over 900 destinations worldwide – and up to 2,500 bonus Miles per night, when using a co-branded Emirates Skywards credit card for payment.
Emirates Skywards’ introduction of personalised offers integrated within the booking flow is an industry-first loyalty benefit, whereby logged-in members can avail enhanced Cash+Miles redemption rates and discounted Miles Upgrades when booking flights directly on emirates.com and the Emirates app. These exclusive offers are tailored to suit each member’s preference – offering vast opportunities to save on travel costs.
Reassuring members during COVID-19
With continued travel restrictions due to the COVID-19 global pandemic, Emirates Skywards is offering its members reassurance and flexibility during this difficult time.
Emirates Skywards Silver, Gold and Platinum members have had their tier review dates extended to enable an additional 12 months at their current status.
SBB and ÖBB are stepping up their long-standing cooperation in international passenger services. The two railway companies are seeking to scale up the existing night train services from six to ten lines. Planning is underway for new night trains from Switzerland to Amsterdam, Rome and Barcelona. Last week, SBB and ÖBB signed a corresponding Letter of Intent. The planned expansion of services can only be guaranteed with financial support from the Swiss climate fund.
Demand for international night train services significantly increased in 2019 and at the start of 2020 until the coronavirus crisis struck. The number of passengers using night train services from Switzerland grew by over 25 per cent with respect to the previous year. The two partner railways consider this a sustainable trend given the significant rise in customer demand for environmentally friendly and resource-efficient travel. There is clear evidence to show that night trains have a positive effect on overall emissions, as they generate modal shift from other modes of transport to rail. ÖBB and SBB share the goal of shifting more travel to rail and thus contributing to a reduction in CO2 emissions from the travel sector. This commitment reflects the aims of the Paris Agreement on climate change and the political and public will to develop an attractive night train network as an important component of environmentally friendly and sustainable mobility in Europe.
With its 19 Nightjet lines and eight further services provided in cooperation with partner railways, ÖBB already runs Europe’s largest night train network. This includes the network from Switzerland run in cooperation with SBB, comprising six lines and one additional service. SBB and ÖBB want to build on this success and expand night train services in Europe together. Over the last few months, the companies have thoroughly tested and evaluated various options for expanding the service. By cooperating, the railway companies will be able to make use of synergies in production and marketing of the service offer and save on costs. In the Letter of Intent signed last week, the two railway companies presented their strategy for expanding services as outlined in “2024 Nightjet Network for Switzerland”. The plans involve expanding the Nightjet network from Switzerland to incorporate a total of ten lines and 25 destinations.
Cornerstones of the expansion plan:
– From 2022 timetable onwards: new Nightjet connection to Amsterdam. As a first step in the expansion process, the two railway companies want to launch a new daily Nightjet service running Zurich–Basel–Frankfurt–Cologne–Amsterdam in December 2021. However, the very limited availability of rolling stock suitable for night train services restricts short-term service expansion. SBB therefore intends to lease suitable rolling stock from German leasing company RDC Asset GmbH.
– Increasing capacity on services to Berlin, Hamburg and Prague and new connection to Leipzig and Dresden. The services currently provided from Zurich via Basel to Berlin and Hamburg are increasingly popular. Capacity on this route will therefore be expanded significantly. SBB and ÖBB wish to serve both destinations with two separate trains covering the whole route, if possible from the 2023 timetable change. This will enable a significant capacity increase. They also plan to run the service to Prague via Germany as a portion of the Berlin Nightjet with sleeping cars and couchettes. The new route would also provide a direct connection to Leipzig and Dresden.
– Plans for new connections to Rome and Barcelona. There are plans for a new line connecting Zurich via Bern, Brig, Domodossola to Rome. A daily connection from Zurich via Bern, Lausanne, Geneva to Barcelona is also planned. This would also integrate French-speaking Switzerland directly into the night train network. It is not yet clear whether it will be possible to run these two lines, as agreements with other partner railways are yet to be reached.
To ensure that night train services can be expanded in the medium to long term, ÖBB is also investing in new rolling stock. The new night train sets are to come into service gradually over a period of time.
SBB and ÖBB are campaigning for greater political support for night trains.
Alongside the planned service expansion, SBB, ÖBB and other partner railways are campaigning for transport policies which facilitate night train operations in Europe. In Switzerland, the total revision of the CO2 Act after 2020 is being debated in the autumn session of the Federal Parliament. The Act provides for support for cross-border rail services from the climate fund. Last week, the Swiss Parliament voted in favour of supporting international passenger services, including night trains. While subject to a final vote and a possible referendum, financial support from the climate fund would compensate for the losses SBB would sustain given the high operating costs night train services involve.
ÖBB is the largest provider of night train services in Europe and has contributed significantly to maintaining night trains services from Switzerland in its existing partnership with SBB. Andreas Matthä, ÖBB CEO, said: “We have no doubts about the Nightjet’s success. With SBB as a committed and effective partner, we can continue to expand the Nightjet network even further. We are investing in new trains: 13 latest generation Nightjet sets will be in operation from the end of 2022. With additional services and modern rolling stock, taking the night train will become an even more attractive option.”
SBB CEO Vincent Ducrot has no doubt that demand for fast daytime services and night trains will continue to grow. “This is a sustainable trend and the demand for environmentally friendly and resource-efficient mobility will continue to increase.”
SBB and ÖBB consider night train services as an important element of the overall service offer and see great potential for creating synergies with daytime services. An attractive rail offer helps to achieve the goal of modal shift from short-haul flights to rail.
Popular, the leading financial institution in Puerto Rico, and JetBlue (Nasdaq: JBLU), the largest airline in Puerto Rico, today unveiled their new partnership with the launch of two new credit cards for customers in Puerto Rico. As trusted brands on the island, both remain committed to the growth of Puerto Rico. With the new JetBlue Mastercard and the JetBlue Mastercard Eleva from Popular, every dollar gets cardmembers closer to traveling to the destination of their choice. Both cards provide an opportunity for customers to earn TrueBlue points – which never expire – even faster and on everyday purchases.
As an added benefit, both products offer a welcome bonus of either 5,000 or 25,000 TrueBlue points by meeting the purchase requirement during the first 90 days of opening the credit account. Both cards feature contactless technology that allows the customer to pay by bringing the credit card close to the Contactless Symbol of a payment terminal.
With this launch, the JetBlue Mastercard becomes the only travel card in Puerto Rico without an annual fee that allows customers to earn points for each purchase. JetBlue purchases will accumulate two TrueBlue points per $1 spent. All other purchases—groceries, restaurants, gasoline, etc.—accumulate one point per $1 spent.
The JetBlue Mastercard Eleva card, with a $99 annual fee, allows cardmembers to earn three TrueBlue points per $1 spent on JetBlue purchases and one point per $1 spent on all other purchases. This card also has additional benefits, such as a free checked bag for the cardmember and up to three travel companions when the card is used to purchase flights operated by JetBlue. It also provides a $100 annual statement credit on the purchase of a JetBlue Vacations package.
The TrueBlue loyalty program rewards members, regardless of their travel frequency. There are no blackout dates with all seats available for redemption, and points never expire. Members earn points for every dollar spent on the base fare for JetBlue-operated flights and bonus points by booking directly on jetblue.com, depending on the fare option selected. For more information regarding these products, interested parties may visit www.popular.com/jetblue.
OSLO (Reuters) – Norwegian Air <NAS.OL> shareholders backed its financial survival plan on Monday, with more than 95% of votes cast supporting the conversion of nearly $1 billion of debt into equity and raising more cash from its owners.
Approval of the scheme is a vital part of the struggling airline’s plan to tap government credit guarantees as it seeks to overcome the coronavirus crisis, which has compounded its already deep financial problems.
Airlines around the world have been hit hard by the impact on travel of the pandemic, with many forced to turn to governments for state aid to avoid bankruptcy.
The airline, which at the end of last year had amassed debts of around $8 billion, said ahead of the meeting that it had won “strong support” from aircraft lessors for its plan.
With 95% of its fleet grounded due to the coronavirus pandemic, Norwegian Air has said it could run out of cash by mid-May unless shareholders supported the plan.
On Sunday it said bondholders had signed up to the plan, which was narrowly rejected in a vote on Thursday.
Norwegian Air said lessors are now willing to convert at least $730 million of debt into equity, up from $550 million earlier, and talks are ongoing for possible further conversion.
“With the significant contributions from lessors and bondholders, the company expects to convert more than 10 billion crowns ($958 million) in debt to equity,” it said.
Based on the results from the shareholders’ meeting, the company will now proceed with the conversion of bonds and lease debt to shares, as well as the public offering of up to 400 million ($38.4 million) from the sale of new stock, it said.
The debt conversion and share sale will allow Norwegian Air to tap government guarantees of up to 2.7 billion crowns, which hinge on a reduction in leverage, on top of 300 million crowns it has already received.
The plan will hand majority ownership to the airline’s creditors and could leave current shareholders with just 5.2%.
The loan could keep Norwegian Air going until the end of 2020, although further cash may be needed as it eyes a gradual ramp-up next year and normalisation in 2022, albeit with a reduced fleet.
Norwegian Air is only paying invoices vital to maintaining minimum operations, such as salaries for staff still employed and critical IT infrastructure. It has put payments for ground handling, debt and leases on hold.
The Oslo Bourse said it had halted trade in Norwegian Air’s shares until the outcome of the vote is presented.
(Reporting by Terje Solsvik; Editing by Christian Schmollinger, Jason Neely and Alexander Smith)
FILE PHOTO: A Norwegian Air plane is refuelled at Oslo Gardermoen airport
OSLO (Reuters) – Norwegian Air <NAS.OL> could run out of cash by mid-May unless its proposed financial rescue plan is approved by creditors and shareholders, the budget carrier warned on Monday.
If approved by bondholders, leasing companies and shareholders, the plan may help Norwegian survive the coronavirus outbreak, which has grounded 95% of its fleet, leaving just 7 aircraft in operation.
But the planned debt-to-equity swap will hand majority ownership of 53.1% to the company’s lessors, while bondholders would own 41.7%, leaving current shareholders with just 5.2%, it said.
The move would allow Norwegian to tap government guarantees of 2.7 billion crowns ($255 million), which are dependent on the company reducing its ratio of debt to equity, and which would come on top of 300 million crowns it has already received.
It is “critical to get access to the state aid package by mid-May before the company runs out of cash,” Norwegian said in a presentation to investors.
Rapid growth has made Norwegian Europe’s third-largest low-cost airline and the biggest foreign carrier serving New York and other major U.S. cities, but with the expansion came debts and liabilities of close to $8 billion by the end of 2019.
Last week, the company reported that four Swedish and Danish subsidiaries had filed for bankruptcy and that it had ended staffing contracts in Europe and the United States, putting some 4,700 jobs at risk.
Norwegian’s shares opened 8% lower on Monday and are down 86% year-to-date.
The company aims to gradually emerge from the COVID-19 crisis with both a short-haul and long-haul network in place, and is targeting a return to normal operations in 2022, it said.
The plan requires backing from bondholders in each of four separate votes planned for April 30, from shareholders in an extraordinary general meeting scheduled for May 4, and from leasing firms.
It maintained plans to raise up to 400 million crowns in cash from owners.
(Editing by Jan Harvey)
FILE PHOTO: A Norwegian Air plane is refuelled at Oslo Gardermoen airport
SYDNEY (Reuters) – China Development Bank (CDB) Financial Leasing Co said on Monday it had agreed with Boeing Co <BA.N> to cancel the purchase of 29 undelivered 737 MAX jets, adding to a string of recent cancellations of the grounded airplane.
The model has been grounded globally for more than a year following deadly crashes in Indonesia and Ethiopia.
“In light of evolving aviation market dynamics, we’ve been working together with Boeing over many months to re-calibrate our MAX orderbook to be in line with our long-term view of the market and related opportunities,” Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement.
The lessor said it retained an order for another 70 of the planes that also have yet to be delivered.
Boeing recorded a total of 150 MAX cancellations in March, including 75 from Irish leasing company Avolon. Boeing remains in talks with regulators seeking approval to return the plane to service, but its customers have also seen a sharp fall-off in demand due to the coronavirus pandemic.
Boeing said in a statement it continued to partner with leasing company customers to help them balance their portfolios in a challenging market.
“As we work to return the 737 MAX to service, our focus remains on addressing our customers’ fleet needs while optimising the delivery of the more than 4,000 airplanes in our 737 backlog,” it said.
“As market conditions normalise, Boeing anticipates that lessors who have restructured or reduced their orderbooks will continue to add MAX aircraft to their portfolios through sale leaseback agreements with airlines,” the planemaker said. “Longer term we expect these lessors will again place orders for direct MAX purchases.”
CDB Financial Leasing said that all 737 MAX 10 jets still on order will be switched to the smaller 737 MAX 8 model, and 20 deliveries will be deferred to dates in 2024, 2025 and 2026.
(Reporting by Jamie Freed; additional reporting by David Shepardson in Washington Editing by Tom Hogue and Muralikumar Anantharaman)
A Boeing 737 Max aircraft is seen parked in a storage area at the company’s production facility in Renton
