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Alitalia Rescue at Risk as Suitors Set Conditions

March 13, 2019 /

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)

Delta May Order 200 New Jets, Considers Alitalia Investment

March 5, 2019 /

(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)

Norwegian Air Owners Approve Discount Share Sale

February 19, 2019 /

OSLO (Reuters) – Norwegian Air’s shareholders overwhelmingly endorsed on Tuesday the lossmaking airline’s plan for a deeply discounted cash call to help bolster its finances, Chairman Bjoern Kise said.

Norwegian Air said on Jan. 29 it would raise 3 billion Norwegian crowns ($348 million) in a rights issue, just days after British Airways owner IAG ruled out a bid for the budget carrier.

Norwegian is trying to replicate on transatlantic flights the low-cost model that dominates the short-haul market, exemplified by the likes of Ryanair and easyJet, but is struggling to make the business profitable.

The European airline sector faces overcapacity and high fuel costs, with several operators going out of business, the latest being British-based Flybmi which filed for bankruptcy on Sunday.

In the rights issue, Norwegian’s owners will get the right to buy two new shares at 33 crowns each for every share they own, compared with Monday’s closing price of 93 crowns.

Holders of more than 99 percent of Norwegian’s equity backed the proposal at a meeting on Tuesday, company officials said.

By selling new shares far below the market price, Norwegian will boost the value of each of the purchasing rights, which can be bought and sold.

This in turn allows Norwegian Air Chief Executive Bjoern Kjos and his business partner, the group’s chairman, to sell some of their subscription rights and reinvest the proceeds in new shares, thus limiting the dilution of their joint stake which stands at 24.66 percent.

Norwegian said last month that billionaire investor John Fredriksen was among those who had agreed to take part in the issue.

($1 = 8.6295 Norwegian crowns)

(By Terje Solsvik, Editing by Nerijus Adomaitis and David Holmes)

La Compagnie Announces Flights Between New York And Nice

December 5, 2018 /

LA COMPAGNIE ANNOUNCES NEW DIRECT BUSINESS-CLASS FLIGHTS BETWEEN NEW YORK AND NICE

Boutique airline expands service with seasonal flights between New York and Nice beginning May 2019

December 4, 2018 (New York, NY) – Four years after launching as an exclusively business-class boutique airline with unbeatable fares between New York and Paris, La Compagnie has announced the launch of a new seasonal route between New York and Nice with the first direct flight scheduled for Sunday, May 5, 2019. Travelers to Nice can now book tickets and enjoy a limited-time Discovery Rate of $1,200 round-trip for the
first 1,000 passengers.

This announcement comes as the latest in a series of positive developments for the airline, who is awaiting the delivery of its first Airbus A321neo in April 2019. With the arrival of the new plane, La Compagnie will grow its fleet to three aircrafts, further allowing the airline to develop its offer with a new trans-Altantic flight and direct access to the South of France during prime season.

“We are excited to announce the launch of our Nice route as we continue to invest in developing the airline,” said Jean Charles Périno, EVP of Sales and Marketing for La Compagnie. “This new route provides a unique opportunity for the airline to offer travelers an additional choice between two popular cities with personalized service at the most attractive fare.”

The new route will operate five times weekly, Wednesday through Sunday, between the months of May and October. Flights out of Newark International Airport (EWR) will depart at 11:30PM, arriving to Nice Côte d’Azur International Airport (NCE) at 1:50PM the following afternoon. Flights departing Nice will be offered at 6:15PM with a same-day arrival in New York at 10:00PM. La Compagnie passengers can also enjoy service to Nice on Monday or Tuesday with connections from Paris Orly Airport (ORY) operated through a special partnership with easyJet.

As with all La Compagnie flights, passengers will be welcomed with lounge and priority access for a painless and exclusive pre-flight experience. Onboard the Boeing 757, guests will enjoy reclining lie flat beds, refreshing amenity kits with Caudalie skincare products, personal iPads, a seasonally-curated menu by Michelin-starred Chef Christophe Langrée, a selective list of French wines and champagne and artisanal croissants by famous French bakery, Maison Kayser.

To take advantage of La Compagnie’s Discovery Rate and experience the new Nice route, visit LaCompagnie.com, call La Compagnie’s call center at 1-800-218-6820, or contact your preferred travel advisor.

The “Discovery Rate” promotion is available for the first 1,000 bookings; travel dates are subject to availability. All taxes and carrier-imposed fees are included. La Compagnie authorizes two checked bags per passenger free of charge; baggage fees apply for any additional bags.

About La Compagnie

Launched in July 2014, La Compagnie is an exclusively business-class airline operating regularly scheduled transatlantic flights between New York (Newark International Airport) and Paris (Paris Orly Airport). Offering competitively low business-class fares, La Compagnie is outfitted with 74 lie-flat seats and provides thoughtful amenities including personal Tablets, Caudalie cosmetic kits and a unique dining experience offering fresh menu items by renowned New York and Paris based chefs. Arriving in April 2019, La Compagnie will operate two brand new A321neos equipped with 76 full flat seats and Unlimited High-Speed Wi-Fi. For reservations, visit LaCompagnie.com, call the airline’s call center at 1-800-218-8187 or contact your travel advisor.

Icelandair Agrees To Buy Rival WOW Air

November 7, 2018 /

(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 /

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)

Ryanair to buy 25 more Boeing 737 MAX aircraft

April 24, 2018 /

DUBLIN (Reuters) – Ryanair (RYA.I) has agreed to buy a further 25 Boeing (BA.N) 737 MAX planes, worth $3 billion at list prices, lifting its order of the U.S. planemaker’s flagship short-haul plane model to 135, the two companies said on Tuesday.

The Irish low-cost carrier, which is the largest operator of Boeing planes in Europe, purchased 100 737 MAX planes in 2014 and took out options on 100 more.

Ryanair said the order leaves it with 75 more options.

It purchased 10 additional MAX planes in June last year, which were on top of the 2014 order.

Chief Executive Michael O’Leary in March said he expected to exercise “pretty much all” of its options.

Ryanair has dubbed the MAX a “game changer” for its business, due to a fuel consumption improvement it says could be up to 16 percent and a greater number of seats.

The configuration Ryanair has ordered has 197 seats compared to 189 in its current fleet of 737s.

Ryanair rivals easyJet (EZJ.L) and Wizz (WIZZ.L) have ordered Airbus (AIR.PA) A321 planes, which seat up to 239 passengers.

Ryanair (RYA.I) has held talks with Boeing about its new larger version of the 737 airliner, the MAX 10, which can carry up to 230 passengers, but has made clear it would only be interested if the price is lowered.

The first of Ryanair’s 737 MAX planes are due for delivery in the first half of 2019 and will use CFM Leap-1B engines.

Ryanair, which currently operates around 430 Boeing 737 planes, says the MAX order will allow it reach its target of carrying 200 million passengers per year by 2024.

(Reporting by Conor Humphries; editing by Jason Neely and Adrian Croft)

Will IAG buy Norwegian

April 12, 2018 /
Parked Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air are pictured at Stockholm Arlanda Airport
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)

London Luton Airport sets new January traffic record

February 13, 2018 /

London Luton Airport has started the new year like it ended the last, with record traffic figures, as it handled over one million passengers in January for the first time in its history.

In total, 1,021,954 passengers (+3.6%) passed through the gateway in January to ensure that it has welcomed over one million passengers every month for 12 consecutive months.

Airport CEO, Nick Barton, says: “Last year was another record breaker at LLA, and we look forward to welcoming even more passengers as we enter our 80th year.

“Throughout 2018, passengers will see the airport transformed as we officially open our new terminal and reach the first phase of construction for the Mass Passenger Transit system, which will replace the current shuttle bus and create a rapid link between the train station and the terminal.

“However, this is only part of the solution to better public transport links and is why we continue to call on the government for four fast trains per hour between central London and Luton Airport Parkway.”

The newly expanded terminal will add eight new boarding gates and a greater variety of shops and restaurants.

The airport notes that passengers will also benefit from an increased number of destinations served from LLA due to the launch of a number of new routes in 2018.

They include Wizz Air introducing eight new services to cities such as Athens, Larnaca, Keflavik and Bari; and new easyJet routes to Genoa, Reus and three other destinations.

This follows a significant expansion of LLA’s route network in 2017, which saw the addition of 22 new routes, meaning that passengers can now choose from more than 140 destinations across Europe, Asia and Africa.

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