Tag: alitalia (Page 2 of 2)

Delta May Order 200 New Jets, Considers Alitalia Investment

March 5, 2019 / WIL BALDWIN

(Reuters) – Delta Air Lines fueled the appetite of planemakers on Tuesday after Chief Executive Ed Bastian said the airline planned to replace some 200 Boeing 757 and 767 aircraft over the next decade.

The plans come as the second largest U.S. airline seeks to grow internationally, though Bastian said at a conference that the company had not yet decided whether to invest in struggling Italian carrier Alitalia.

Atlanta-based Delta’s potential fleet order, which analysts say would be worth over $10 billion, could boost proposals by Boeing Co to launch a new plane in that segment while Airbus is preparing to counter with a new version of A321 and the larger A330neo.

Delta is “very interested” and in discussions with Boeing about its proposed new midsized airplane, known as the NMA, Bastian said. Boeing will decide in 2020 whether to produce the plane which industry sources say would have two aisles and seat seven across.

The plane aims to address the so-called middle of the jet market between traditional narrowbody jets with one aisle and long-distance widebody planes.

“Hopefully they’ll decide to go,” Bastian said.

Delta is already in the process of replacing one-third of its mainline fleet, one of the largest and oldest among U.S. airlines, in the next five years.

Delta shares were up 2.5 percent at $50.03 in afternoon trading after Bastian said spring and summer travel demand was solid.

Delta Air Lines reveals their first A220 in Atlanta, Georgia at the TechOPS engine shop at Hartsfield Jackson International airport on Monday October 29,2018. (Chris Rank/Rank Studios)

ALITALIA INVESTMENT?

Bastian said it was too early to decide whether to invest in Alitalia, which was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans, leaving the Italian government seeking a buyer to save the airline.

Italy’s state-controlled railway Ferrovie dello Stato (FS) said last month it would start negotiations with Delta and EasyJet Plc to draft a rescue plan, the third in a decade, for the struggling airline.

Delta executives have held talks in Rome in recent weeks, according to Italian industry sources, but doubts remain whether an outside investor would be willing to take a minority stake in the strike-prone airline.

Bastian said that the numbers being thrown around for Alitalia are “pretty large” and “not the kind of numbers that we’re considering, just to quell any concerns.”

Still, he said it makes sense to consider an investment in Italy, an important market for U.S. consumers, and noted that Delta’s global growth over time will skew toward international rather than congested domestic markets.

That growth could come through direct investments in overseas carriers.

“You can’t actually own partner carriers so you have to find ways to influence them beyond just a commercial contract as a partner, and what we have found is that by making an investment into these businesses we can get actually inside the board room and help to start shape the strategy.”

(Reporting by Tracy Rucinski in Chicago, additional reporting by Tim Hepher in Paris; Writing by Nick Zieminski; Editing by Phil Berlowitz and Lisa Shumaker)

Air Italy Flights Rekindle U.S. Carrier Anger

December 19, 2018 / WIL BALDWIN

ROME (Reuters) – Air Italy will start flying to Chicago next year, a move likely to revive a dispute between its minority shareholder Qatar Airways and U.S rivals trying to squeeze Gulf operators out of their domestic market.

Formerly known as Meridiana, Air Italy is the country’s second-largest airline, behind ailing Alitalia [CAITLA.UL], and state-owned Qatar Airways holds a 49 percent stake in it.

Air Italy will fly to Chicago three times a week from Milan Malpensa airport starting from May 14, 2019, Chief Operating Officer Rossen Dimitrov told Reuters.

Since 2015 the largest U.S carriers — Delta Air Lines (DAL.N), American Airlines Group (AAL.O) and United Airlines (UAL.N) — have argued their Gulf rivals are being unfairly subsidised by their governments, distorting competition.

Gulf airlines have always denied those accusations and in May the companies reached a voluntary agreement, saying they would not add new flights to the United States.

However, Air Italy has been flying to New York and Miami since June and will start serving San Francisco and Los Angeles from April 2019.

That has drawn criticism from an alliance of U.S.-based airlines grouped in the “Partnership for Open & Fair Skies”, that Qatar Airways is using Air Italy to offer additional flights between the U.S. and Europe, despite the agreement.

“Once again, Qatar is using Air Italy as a Trojan horse built from subsidized cash to avoid its commitments to the Trump administration and launch new … routes,” said Scott Reed, campaign manager for the Partnership for Open & Fair Skies.

In an emailed statement, Reed called on U.S. President Donald Trump to intercede on the behalf of U.S. airlines.

Dimitrov tried to dismiss any suggestion that Air Italy was acting improperly, noting that Qatar Airways was a minority shareholder.

“They do not dictate what we do and where we go. They do not manage us,” he said.

He added that he would be happy to work with the U.S airlines under code-share agreements, from which both sides would benefit, “rather than spending time and money fighting each other”.

The opening of the Chicago route next year is part of a wider plan, announced in May, in which the airline aims to grow its fleet and passenger numbers fourfold by 2022.

(Reporting by Giulia Segreti and Alberto Sisto; Editing by Keith Weir and Crispian Balmer)

Image from http://www.airitaly.com

Icelandair Agrees To Buy Rival WOW Air

November 7, 2018 / WIL BALDWIN

(Reuters) – Icelandair (ICEAIR.IC) has agreed to buy rival Icelandic airline WOW air from its founder for about $18 million in an all-share deal aimed at creating a stronger international competitor.

Airlines are looking to consolidate in many markets as a result of rising running costs, largely to higher oil prices, and increased competition from low-cost, budget carriers.

WOW has focussed on low-cost travel across the Atlantic, using smaller single-aisle planes to fly between Iceland and destinations in the United States and Europe.

While there has been some consolidation in Europe over the last year, with Lufthansa and easyJet acquiring parts of failed airline Air Berlin in 2017, the chief executives of the continent’s biggest airline groups say more is to come.

Struggling Italian carrier Alitalia is seeking new investors and British Airways-owner IAG (ICAG.L) bought a stake in Norwegian Air (NWC.OL) with a view to a takeover.

A jump in the oil price could spur more consolidation, as weaker players are likely to suffer over the winter period as costs rise during a period when fewer people tend to fly.

Both Icelandic airlines, which Icelandair said would continue to operate under separate brands, use Keflavik Airport as their main hub between Europe and North America.

Together they have a combined 3.8 percent share of the transatlantic market, Icelandair, which warned on profit in July due to an increase in capacity on some routes across the Atlantic, added in a statement.

Icelandair shares jumped by nearly 50 percent after it announced the WOW takeover, the biggest one day percentage gain in its stock price since September 2009. The headline value of its offer for WOW was based on Friday’s closing share price.

“WOW air has been Icelandair’s main competitor and the acquisition is likely to lead to increase in average fares and better capacity control on the market to and from Iceland.” Arion Banki analyst Elvar Ingi Moller said.

WOW’s founder and sole owner Skuli Mogensen, who will receive 272 million shares in Icelandair, said that the deal will strengthen its international competitiveness.

Moller said WOW, which has 14 Airbus A320 family aircraft and three widebody A330 planes, has come under pressure due to higher oil prices and lower air fares in recent months.

Icelandair said its shareholders are due to meet to vote on the deal in the near future.

(Reporting by Tommy Lund; Additional reporting by Saray Young; Editing by Jon Boyle/Louise Heavens/Alexander Smith)

Image from www.boeing.com

EasyJet Still Interested In Restructured Alitalia

October 31, 2018 / WIL BALDWIN

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)

Will IAG buy Norwegian

April 12, 2018 / WIL BALDWIN

Parked Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air are pictured at Stockholm Arlanda Airport March 6, 2015. REUTERS/Johan Nilsson/TT News Agency

By Sarah Young

LONDON (Reuters) – British Airways-owner IAG (ICAG.L) said it is considering making an offer for Norwegian (NWC.OL), a low-cost carrier worth about $1.2 billion, in a deal which would expand its budget offerings and give it control of a struggling rival.

IAG said on Thursday it had bought a 4.61 percent stake in Norwegian as a platform for starting talks, and that could lead to it making a full offer for the airline founded by former fighter pilot Bjorn Kjos.

“IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made,” IAG said in its statement.

Shares in Norwegian, a stock which this year has been pounded over worries about its profitability, surged 37 percent on the news. https://reut.rs/2qqcSn6

A trailblazer of low-cost long-haul flying in Europe, Norwegian has been leading the charge to eat into the trans-Atlantic market where traditional full-service carriers like British Airways have historically made most of their profits.

Norwegian has already made its impact felt: British Airways and others have recently tried to compete more directly with Norwegian by introducing basic economy fares.

But Norwegian’s fast expansion has left it under pressure to control costs and shore up its balance sheet.

That has provided IAG, formed in 2011 through the merger of traditional flag-carriers British Airways and Iberia and led by CEO Willie Walsh, with an opportunity, say analysts.

Seasoned deal-maker Walsh was much quicker than rival full-service airlines Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE) to embrace budget flying, buying short-haul carrier Vueling in 2015 and setting up IAG’s own long-haul low-cost carrier Level last year.

“Willie Walsh has long been interested in the low-cost long haul concept, long before the creation of Level. This may be an attempt to accelerate its development, while also adding to the scale and reach of Vueling in the intra-European market,” Liberum analyst Gerald Khoo said.

Adding Norwegian’s short-haul operations in Europe to Vueling would create a budget carrier better placed to compete against the continent’s two biggest low-cost airlines Ryanair (RYA.I) and easyJet (EZJ.L).

Bernstein analysts said a full takeover could be expensive but suggested a partnership deal would benefit both parties.

“A partnership that looks to maximize the synergies of the two networks, minimise duplications of capacity and investment on key routes, and use IAG’s travel management capabilities to improve Norwegian’s expertise in this area could all provide some of the benefits of consolidation without the likely high cost of a deal,” they said.

NORWEGIAN UNDER PRESSURE

Highlighting the difficult state of Norwegian’s finances, the airline last month raised $168 million in a share sale after warning of a larger than expected first-quarter loss.

Norwegian said in its statement on Thursday that it had no prior knowledge of IAG’s actions, but welcomed the investment.

“Norwegian believes that IAG’s interest in the company confirms the sustainability and potential of our business model and global growth,” it said.

Norwegian’s shares, temporarily halted after the IAG news, rose as much as 39 percent to 250 crowns when they resumed trading, valuing the company at 9.5 billion Norwegian crowns ($1.22 billion).

Whether it proceeds with an offer for Norwegian or not, through its new investment, IAG will at least be well-placed to influence its rival.

“If there is no imminent bid for Norwegian, IAG is just the first vulture to have landed that would like a say in how Norwegian’s long-distance fleet … is dismantled and sold,” Norne analyst Karl Johan Molnes said.

There will be no buying Norwegian on the cheap, however, said SEB analyst Jo Erlend Korsvold.

Even after Thursday’s rally, Norwegian’s founder and top owner, CEO Kjos who controls a quarter of the company’s shares, is expected to demand a significantly higher price before selling, said Korsvold.

Kjos was not available for comment when contacted by Reuters.

IAG’s interest in Norwegian would see a wave of consolidation in European air travel which started last year extend its reach to long-haul travel.

Lufthansa and easyJet expressed interest in Italy’s struggling Alitalia [CAITLA.UL] this week.

Ryanair last month agreed to buy a majority stake in a new Austrian leisure airline founded by Formula One former champion Niki Lauda, while easyJet bought a parts of failed airline Air Berlin last year.

Shares in IAG initially dropped 3.4 percent on the news before recovering to trade down 0.7 percent at 611 pence. The company has a market capitalisation of about 12.6 billion pounds ($17.89 billion).

($1 = 7.7844 Norwegian crowns)

($1 = 0.7043 pounds)

(Reporting by Sarah Young, additional reporting by Terje Solsvik and Ole Petter Skonnord in OSLO and Victoria Bryan in BERLIN,; editing by Kate Holton and Adrian Croft)

Alitalia, national flag airline of Italy, reports 2015 net loss

May 3, 2016 / WIL BALDWIN

Alitalia, the national flag airline of Italy, reported a net loss for 2015 of €199 million. That was down from a loss of €580 million in 2014, as the SkyTeam alliance member confirmed its turn around is still on track. Alitalia plans to return to profitability by 2017, as it works to execute the company’s three year turnaround plan. Alitalia reported total revenue for 2015 of €3.3 billion, and an average flight load factor of 76.2% for the fiscal year. The company is focusing on efforts to improve its service, update its aircraft fleet and route networks, and reduce operating losses.

Alitalia still facing headwinds in its restructuring

Alitalia is still facing some very considerable headwinds as it seeks a return to profitability. There was a fire that broke out at the Rome Fiumicino International Airport on May 7, 2015. This fire caused major damage to the facilities, and caused severe disruptions in operations that are estimated to have cost the airline €80 million. This fire also resulted in my wife and I almost missing our Lufthansa flight from Rome to Munich on the 11th of May. Our flights departure was relocated to Terminal 2 from Terminal 3, where the Lufthansa ticket counter was located. It also appeared that the agents at the ticket counter were engaged in a work slow down. The line hardly moved until about 15 minutes before the scheduled departure time. Then, they rushed us all through, telling us we now had to go out and over to the other terminal to catch our flight. Some other issues that Alitalia has faced included the suspension of their route between Rome and Caracas. The airline pulled the plug on that route as a result of the Venezuelan government’s refusal to allow the repatriation of foreign currency from their country. They also suffered decreased load factors on their Paris routes following the terrorist attacks on the “City of Lights”.

There are positives that Alitalia reported. These include rising revenue from the airlines codeshare partnerships. The biggest of these partners is Etihad Airways of Abu Dhabi. The two carriers shared more than 450,000 passengers between their two networks in the last fiscal year. Etihad Airways bought a 49% stake in Alitalia in 2014 for €387.5 million. Another big partner for the Italian air carrier is Air Berlin. Those two carriers are working to improve their network connections across Austria, Germany, Italy, and Switzerland. On time performance also rose to 80.2%, and the airlines share of the Italian air travel market rose to 30%.

1 Euro = 1.16 US Dollar

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Leonardo da Vinci Fiumicino Airport