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Delta The Likely Buyer of 10 Airbus A330neo Jets

PARIS (Reuters) – U.S. carrier Delta Air Lines (DAL.N) has emerged as the probable buyer for 10 Airbus A330neo jets worth $3 billion, industry sources said, in a boost for the becalmed European model.

Airbus (AIR.PA) announced an order for 10 of the 300-seat aircraft in its latest monthly order update on Friday, but withheld the name of the buyer for the Oct. 30 deal.

Two industry sources, asking not to be named, said Delta (DAL.N) was the buyer. A third said Delta had been looking to expand an existing order for 25 A330neo aircraft.

Airbus declined comment. Delta was not immediately available for comment.

If confirmed, the deal would mark the second order for the slow-selling A330neo in as many weeks after Kuwait Airways ordered eight of the long-haul planes in mid-October.

Airbus is aggressively seeking more orders for the latest version of its profitable A330 franchise after sales of the engine-upgraded A330neo model fell short of expectations in the face of heavy competition from the newer Boeing 787.

However, industry sources have questioned how far recent orders represent net new sales for the European giant, saying they could replace at least some earlier orders for the A350.

The new-generation A350 is a longer-term bet for Airbus and competes with the 787 and Boeing 777. But one market source said Airbus was willing to give up some orders for the newer plane in order to keep the A330neo afloat and prevent production cuts.

Airbus has given cautious signals that it is prepared to be flexible in both directions when offering combinations of the A330 and A350, sources said, though it cannot afford to lose too many orders or customers for the more strategic A350 plane.

The wide-body A330neo is part of a pair of upgraded aircraft – the other being the strong-selling A321neo narrowbody – that strategists say Airbus is trying to push into the market to reduce the space for a new 220-260 seat, mid-sized jet being studied by Boeing. A decision on that project is due next year.

Airbus is especially keen to continue A330-series production because it has been a major source of profits and cash.

Airbus also needs an aircraft like the 250-300 seat A330 to offer airlines a step-up into the wide-body market from its largest narrowbody, the A321neo, which holds up to 240 people.

Without it, Airbus’s smallest wide-body would be the 315-seat A350-900, which leaves a large gap in Airbus’s portfolio above the A321neo for rival Boeing (BA.N) to exploit.

(Reporting by Tim Hepher and Tracy Rucinski; Editing by Laurence Frost and Edmund Blair)

Image from www.airbus.com

Gol Says Brazil’s Foreign Qwnership Ban Is Outdated

NEW YORK, Nov 14 (Reuters) – Decades-old regulations barring foreigners from owning Brazil’s airlines are outdated and “might make no sense anymore,” the top executive of Brazil’s largest airline, Gol Linhas Aereas Inteligentes SA, said on Wednesday.

Foreigners are limited by law to a 20 percent stake in any Brazilian airline’s voting stock. But while Brazil may be entering an economic liberalization phase – far-right President-elect Jair Bolsonaro has vowed to cut spending and privatize state companies – Gol Chief Executive Officer Paulo Kakinoff said it is unclear whether the new administration will seek to loosen the existing regulations.

“Our company has always been in favor of bringing to our country all the conditions to have access to foreign capital without any kind of restriction,” Kakinoff told Reuters in an interview. “This should be one of the positive effects of having some change in the current legislation.”

Outgoing President Michel Temer has said he is in favor of allowing full foreign ownership. In 2017, he said he would enact this change through executive action, only to change his mind and submit a bill to Congress, where the plan has stalled.

Kakinoff added that Gol is not currently in talks with Delta Air Lines Inc, which owns a 9.5 percent stake in Gol preferred shares, or any other entity, about taking a bigger stake in the Brazilian carrier.

In October, Gol said it planned to acquire full control of its listed loyalty program, a subsidiary called Smiles Fidelidade SA.

Gol’s stock surged in response, while Smiles’ plummeted almost 40 percent in one day.

Gol Chief Financial Officer Richard Lark said the airline needed to incorporate Smiles to avoid “competitive disadvantages,” especially with its largest local rival, Latam Airlines Group SA, which earlier this year decided to gobble up its loyalty program company, called Multiplus SA.

A key difference in the transactions, however, is that Latam offered cash to investors, while Gol is offering only its own preferred stock, with the exchange ratio yet to be defined.

Some minority shareholders have criticized the transaction, saying they will lose voter rights if their Smiles shares are exchanged for Gol shares, a charge the airline disputes.

“Although the company owns preferred shares in the operational company, decisions about the airline and the loyalty program will continue to be taken at the board of Gol. It won’t be a shell company,” Lark said.

Reporting by Marcelo Rochabrun; Editing by Dan Grebler

Image from www.voegol.com

EasyJet Still Interested In Restructured Alitalia

Oct 31 (Reuters) – Budget airline EasyJet said on Wednesday that it had submitted a revised expression of interest for a restructured Alitalia, in response to the new Italian government’s ongoing sales process.

EasyJet had said in September that it was still talking to the Italian government over Alitalia’s short-haul operations, adding that any deal needed to make commercial sense.

Alitalia, a symbol of Italy’s post-war economic boom but now struggling to compete against low-cost carriers and high speed trains, was put under special administration last year and has been looking for a buyer.

EasyJet said the content of the expression of interest was subject to confidentiality, but that the move was in line with its existing strategy for Italy.

Germany’s Lufthansa and Wizz Air had submitted expressions of interest this year for Alitalia or parts of its business, but the lengthy formation of a new anti-establishment government delayed the process.

Wizz Air did not immediately comment when asked if the company had also submitted a revised expression of interest. Lufthansa said on Tuesday that it had no interest in participating in a government-led restructuring of the Italian carrier.

Delta Air Lines declined to comment on Friday on reports that the second biggest U.S. carrier was interested in buying a stake in Alitalia.

The deadline to sell Alitalia was meant to be on Wednesday and Italy’s Deputy Prime Minister Luigi Di Maio said last week that many private investors were interested in the airline.

(Reporting by Noor Zainab Hussain in Bengaluru and additional reporting by Alistair Smout in London; Editing by Elaine Hardcastle and Jane Merriman)

Southwest Balks At American Airlines New Idea For Cuba Routes

Southwest ripped American’s proposed rule change that would alter how U.S. airlines handle their routes to Cuba, calling the idea “unprecedented” in an Oct. 10 regulatory filing.

The U.S. opened up the Cuban market a few years ago and allowed airlines to apply for routes. Only 20 daily routes to Havana were allocated to U.S. airlines.

Both American Airlines Group, Inc. (NASDAQ: AAL) and Southwest Airlines Co. (NYSE: LUV) were granted routes. When an airline is awarded a route, it’s tied to that specific city. So, an airline can’t shift its route allocations to different U.S. cities to match demand.

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Southwest balks at American Airlines

Airlines Win, Passengers Lose As Congress Drops Reasonable Fee Rule

WASHINGTON, Sept 22 (Reuters) – The U.S. airline industry scored a win on Saturday as bipartisan congressional legislation dropped plans to mandate “reasonable and proportional” baggage and change fees, but included other new passenger protections.

After weeks of negotiations, a 1,200-page bill to reauthorize the Federal Aviation Administration (FAA) was unveiled early Saturday that would require the FAA to set minimum dimensions for passenger seats — including legroom and width — and prohibits airlines from involuntarily removing passengers from flights after they’ve cleared the boarding gate.

In April 2017, video went viral on social media of 69-year-old passenger David Dao being dragged from a United Airlines flight at Chicago’s O’Hare International Airport after he refused to give up his seat to make room for crew members. United apologized and promised not to remove seated passengers to make room for other passengers.

But airlines had heavily lobbied against new rules limiting fees. U.S. airlines revenue from baggage and reservation change fees increased from $5.7 billion in 2010 to $7.5 billion in 2017. Other fees are not reported to regulators.

The compromise bill did not include language adopted by a Senate Committee in 2017 that would have required the reasonable fee rules. It was struck in a compromise unveiled by Senate Commerce Committee Republican chairman John Thune and House Transportation and Infrastructure Committee chairman Bill Shuster, a Republican, along with the top Democrats on the two committees Senator Bill Nelson and Representative Peter DeFazio.

Congress is set to vote on the measure next week ahead of a September 30 deadline.

American Airlines Group Inc became the latest major airline on Thursday to hike checked bag prices by $5 for the first bag to $30, joining Delta Air Lines Inc, United and JetBlue Airways Corp.

Airlines for America, an airline trade group, has said the fee provision would result in “government-mandated price controls” and should be rejected and the Trump administration also strongly opposed the provision.

The bill also requires the U.S. Transportation Department to set new rules authorizing commercial drone deliveries and gives the Justice Department and Homeland Security Department new authority to disable or destroy drones if they pose a threat to government facilities after the Trump administration warned it did not have the legal authority it needed to address threats.

Under the bill, airlines must refund passengers for services they paid for but did not receive and will enshrine in law a prohibition on passengers making mobile phone calls while in flight or using e-cigarettes.

The bill requires airlines to allow passengers to check strollers if they are traveling with a small child and require regulators to determine if it is unfair or deceptive for airlines to tell passengers “that a flight is delayed or canceled due to weather alone when other factors are involved.”

It also makes it unlawful for any person to place a live animal in an overhead storage compartment, prompted by outrage over the death a dog in March in an overhead compartment of a United flight. It also gives the Transportation Department authority to require airlines to allow pregnant passengers to board earlier.

The bill would also authorize a return of “supersonic” transport with reduced sonic booms, and provides for an additional $1.68 billion in immediate funding for disaster relief in the wake of Hurricane Florence.

It also directs the FAA to establish an Office of Spaceports to provide guidance, support licensing for spaceports, and promote infrastructure improvements for future space travel.

The bill also addresses sexual misconduct in aviation by creating a task force to review practices and increases civil penalties for interfering with cabin or flight crew members.

(Reporting by David Shepardson)

Did JetBlue Get 72% Off Airbus A220 Order?

JetBlue Airways Corp. got a great deal on its latest aircraft purchase from Airbus SE, according to Moody’s Investors Service. The carrier probably paid $1.4 billion to $1.7 billion for 60 Airbus A220-300 jets, or between $23 million and $28 million per plane, Moody’s analyst Jonathan Root said in a report Friday, citing estimates by appraisers and price breaks that are typical for large orders. “As with most campaigns, we believe the decision comes down to the lowest all-in cost, because the narrow-body aircraft manufactured by Airbus and Boeing have similar capabilities and operating costs for the majority of operators,” he said.

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Did JetBlue Get 72% Off Airbus A220 Order?

Hawaiian Airlines Begins Code-Sharing With Japan Airlines

Last year, more than 1.5 million visitors traveled from Japan to Hawaii. That makes Japan the biggest source of international tourists to Hawaii, nearly equaling all other international markets combined.

For more than seven years, Hawaiian Holdings (NASDAQ: HA) and Japan Airlines have been fierce competitors in this massive travel market. However, they recently decided to team up. On Sunday, the two carriers began code-sharing — selling flights on each other’s aircraft — for dozens of routes.

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 Hawaiian Airlines code-share with Japan Airlines

American Airlines angry over O’Hare Airport expansion plan

American Airlines dropped a bombshell this morning that could imperil the Chicago Mayoral $8.5 billion plan to expand and modernize Chicago’s O’Hare International Airport.

It’s a plan the mayor and the Chicago Department of Aviation commissioner unveiled to one of the Chicago Tribune’s political reporters on Sunday.

This morning, American, which has its third-largest hub at O’Hare, said — in no uncertain terms — it would not sign off on a new lease at O’Hare or on the massive O’Hare expansion Emanuel is proposing unless the city is prepared to rework the deal and make the gate distribution at the expanded airport more equitable than it would be as the proposal now stands.

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American Airlines angry over O’Hare expansion plan

Delta Air Lines Rumored to Want Boeing 797

Last year, Boeing (NYSE: BA) strained its relationship with U.S. airline giant Delta Air Lines (NYSE: DAL) by attempting to have big tariffs imposed on Delta’s purchase of CSeries jets from Bombardier. Many pundits saw Boeing’s trade complaint as a risky move that could alienate a key customer — especially after Delta ordered the Airbus (NASDAQOTH: EADSY) A321neo last December instead of the Boeing 737 MAX 10.

However, these fears weren’t justified. Delta isn’t going to make bad business decisions just to punish Boeing. In fact, Delta Air Lines CEO Ed Bastian wants the carrier to be a launch customer for Boeing’s proposed “middle-of-the-market” jet, according to Bloomberg.

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delta wants Boeing 797

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