In his letter, Haji-Ioannou has also called for removal of easyJet’s Chief Finaicial Officer Andrew Findlay, after earlier calling for a board meeting on a vote to remove Andreas Bierwirth as a director, which was rejected by easyJet.
“If this 4.5 billion pound liability to Airbus is preserved – and not cancelled – by the easyJet board then, I regret to report, easyJet will run out of money around August 2020, perhaps even earlier,” the founder said in his letter.
“I will certainly not be throwing good money after bad. For the avoidance of doubt, I will not inject any fresh equity in easyJet whilst the Airbus liability is in place.”
He also stated that he will continue to call for the removal of more directors every time the company delays the vote.
He also wants easyJet to reduce its fleet size to 250 aircraft from 350, adding that the airline will not need any more additional new planes for many years to come.
(Reporting by Juby Babu in Bengaluru; editing by Diane Craft)
(Reuters) – Former U.N. ambassador Nikki Haley has resigned from Boeing Co’s board after opposing its bid for government financial assistance due to the crisis caused by the coronavirus outbreak.
“I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position,” Haley said in a letter to the company’s management released by Boeing on Thursday.
“I have long held strong convictions that this is not the role of government.”
Haley, a former South Carolina governor, has often been mentioned as a future presidential candidate. “The board and executive team are going in a direction I cannot support,” she wrote.
When asked to respond to Haley’s concerns, Boeing said only the company appreciated her service on the board and wished her well.
Boeing this week said it was seeking on behalf of itself and the aviation manufacturing industry at least $60 billion in government loan guarantees and other assistance. The sector faces huge losses from the coronavirus pandemic as airlines halt flights and some delay orders.
A Senate Republican proposal introduced Thursday would allow aviation manufacturing firms like Boeing to seek collateralized loans and loan guarantees from a $150 billion fund but not provide any cash. The final decision on eligibility would be up to the U.S. Treasury.
“We are not bailing out the airlines or other industries – period,” said Senator Richard Shelby, a Republican who chairs the Appropriations Committee.
To ensure the government is compensated for risks in making loans, the U.S. Treasury could seek equity, warrants stock or other instruments to ensure the government participates in any gains.
Haley’s resignation letter was dated Monday, the same day Boeing confirmed it was in talks to seek short-term assistance from the U.S. government.
Boeing has racked up nearly $19 billion in costs tied to its 737 MAX aircraft, which has been grounded for the past year after two fatal crashes in five months. The company has been working to win approval for the plane to return to service.
(Reporting by Ankit Ajmera in Bengaluru and David Shepardson in Washington and Michelle Nichols in New York; Editing by Arun Koyyur and Tom Brown)
Delta Air Lines has successfully acquired a 20 percent equity stake in LATAM Airlines Group S.A for approximately $1.9 billion.
Delta Air Lines has successfully completed its previously announced tender offer and has acquired a 20 percent equity stake in LATAM Airlines Group S.A for approximately $1.9 billion, an important milestone toward bringing together the leading airlines in North and South America. This investment continues Delta’s strategy of making equity investments in key airline partners around the globe.
“We look forward to working with LATAM to create a truly world-class partnership that will give our customers unparalleled access throughout the Americas,” said Steve Sear, Delta President — International and Executive Vice President — Global Sales. “Equity investments like this help create alignment within our partnerships as we bring together our brands, enabling us to provide the very best service and reliability for our shared customers.”
In September, Delta and LATAM announced a strategic partnership, including the now completed 20 percent equity investment and also a commercial joint venture. Once fully implemented, this partnership will unlock growth opportunities for both airlines and offer significantly expanded travel options for customers, with access to 435 destinations worldwide.
Most recently, the carriers announced that they will initially launch codesharing for flights operated by certain LATAM affiliates in Colombia, Ecuador and Peru beginning in the first quarter of 2020. The codeshare will offer customers increased connectivity between up to 74 onward destinations in the United States and up to 51 onward destinations in South America.
The enhanced cooperation and codeshare agreements are subject to governmental and regulatory approvals.
Investment firm Bain Capital Credit will invest an initial $360 million in a joint venture with Atlas Air Worldwide Holdings (NASDAQ: AAWW), a major provider of outsourced all-cargo aircraft operations and other aviation services, to lease freighter aircraft, the companies said Wednesday.
Under the agreement, Atlas’ leasing subsidiary Titan Aviation Holdings Inc. will contribute $40 million of equity towards the portfolio, which ultimately could have a value of $1 billion with additional commitments to acquire aircraft over the next several years. The number and type of planes to be acquired are still to be determined. Titan will identify and source aircraft, as well as provide lease-management services to the venture.
The new company will be called Titan Aircraft Investment, Dan Loh, Atlas’ vice president of investor relations, told FreightWaves. “The parties are working expeditiously to complete and implement all elements of the joint venture,” he said.
Since its inception in 2009, Titan has grown to become the third-largest freighter lessor globally by fleet value with over 30 aircraft and a book value of over $1.5 billion.
Titan provides aircraft to airlines, which put them under their own operating certificate and then fly, maintain and insure them. Contracts are usually long term.
FILE PHOTO: BAIC Group automobile maker at the IEEV New Energy Vehicles Exhibition in Beijing
BEIJING/FRANKFURT (Reuters) – Daimler’s <DDAIF> main Chinese joint venture partner BAIC Group has signalled its intention to increase its stake in the German luxury car manufacturer, sources briefed on the matter said, after it built up a 5% Daimler holding in July.
Officials at BAIC’s listed company, BAIC Motor Corp Ltd, said at investor conferences in mid-October that “both sides are willing to increase stakes in the other”, responding to questions about future relationship between BAIC Group and Daimler, the sources said.
Daimler said in a regulatory filing on Friday that HSBC held 5.23% in Daimler’s voting rights directly as well as through instruments such as equity swaps as of Nov 15. BAIC has used HSBC to help it build its initial 5% stake.
Sources declined to be named as they are not allowed to speak to media.
A Daimler spokesman on Monday said, that the company had received notification from HSBC that the voting stake of 5% has been exceeded.
While the spokesman would not say whether BAIC played a role in the transaction, he added that Daimler welcomed long-term shareholders such as BAIC, who support the carmaker’s strategies.
“Daimler AG appreciates BAIC as long-standing partner and long-term investor,” the spokesman said in a written statement.
“Such shareholders help us to further safeguard and strengthen the capitalization of our company,” the statement continued.
BAIC was not immediately available for comment.
Geely, Daimler’s biggest shareholder with a 9.7% stake, said: “We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy.”
BAIC (Beijing Automobile Group Co Ltd) has been Daimler’s main partner in China for years and operates Mercedes-Benz factories in Beijing through Beijing Benz Automotive.
Two months before its July stake deal was announced, sources told Reuters that BAIC wanted to invest in Daimler to secure its investment in Beijing Benz Automotive.
In March, sources told Reuters Daimler had asked Goldman Sachs <GS> to help it explore increasing its stake in BAIC’s Hong Kong-listed company.
The partners also planned to revamp manufacturing facilities to make Mercedes Benz-branded trucks via their commercial vehicle joint venture Foton Daimler Automotive (BFDA), Reuters reported in August citing a document and sources familiar with matter.
The companies also said Daimler and BAIC’s new energy vehicle unit BluePark have jointly developed a battery research lab in Beijing.
State-owned BAIC built its stake after Li Shufu, chairman of rival private automaker Zhejiang Geely Holding Group, built a 9.69% stake in Stuttgart-based Daimler in early 2018.
By using Hong Kong shell companies, derivatives, bank financing and structured share options, Li kept the plan under wraps until he was able, at a stroke, to become Daimler’s single largest shareholder.
Since the investment, Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture.
Zhejiang-based Geely owns Volvo while BAIC in addition to Daimler has a partnership with South Korea’s Hyundai Motor <HYMTF>.
Daimler said it had collaborated with BAIC in areas such as production, research and development and sales since 2003.
(Reporting by Yilei Sun and Edward Taylor; additional reporting by Arno Schuetze and Ludwig Burger; editing by Brenda Goh, Jason Neely and Louise Heavens)
China’s BAIC willing to increase Daimler holding after 5% stake buy – sources FILE PHOTO: Ola Kaellenius, Chairman of the Board of Management of Daimler AG, speaks at a media event during the Guangzhou auto show in Guangzhou
LONDON (Reuters) – U.S. buyout fund Warburg Pincus said on Monday that it had clinched a deal to sell its European airline services firm Accelya to rival private equity fund Vista Equity Partners for an undisclosed amount.
The deal, which was first reported by Reuters, allows Warburg Pincus to fully cash out after backing the Barcelona-based company for the past two years.
The U.S. investment firm launched an auction process during the summer to find a new owner for the business which serves more than 200 airlines including British Airways, Lufthansa and EasyJet.
Warburg Pincus bought Accelya from French private equity firm Chequers Capital in 2017 and quickly tripled its revenues by merging it with Mercator, a Dubai-based travel services group in which the U.S. buyout firm had been an investor since 2014.
Vista Partners, whose portfolio is mostly focused on software companies, was recently vying to buy a majority stake in WPP’s (WPP) data analytics firm Kantar but lost it to Bain Capital.
Its Chief Executive Robert Smith said Accelya was “at the forefront of innovation and positioned to shape the airline and travel industry for decades to come.”
Accelya employs 2,500 employees across 24 offices in 14 countries and recently signed a long-term deal as the International Air Transport Association’s (IATA) technology partner.
Bank of America (BAC) and Evercore advised Warburg Pincus on the deal while Vista hired Goldman Sachs (GS) and Houlihan Lokey to work on the purchase.
Law firm Kirkland & Ellis and Simpson Thacher served as the legal advisors to Warburg Pincus and Vista, respectively.
Reporting by Pamela Barbaglia; Editing by Susan Fenton
LOS ANGELES, November 11, 2019 – Air Lease Corporation (the “Company” or “ALC”) announced today that the Company initiated the sale of a portfolio of 19 aircraft to Thunderbolt III Aircraft Lease Limited (“Thunderbolt III”), a newly formed entity, and Thunderbolt III has now completed its equity and debt financing transactions. The aircraft comprise a mix of narrowbody and widebody jet aircraft that, as of August 31, 2019, had a weighted average age of 9.7 years and were leased to 18 lessees based in 15 countries. ALC and its Irish affiliate, ALC Aircraft Limited, will act as servicers with respect to the aircraft and ALC will act as portfolio manager. ALC estimates that the process of transfer and sale of the majority of aircraft will occur progressively during Q4 2019 and Q1 2020.
The Thunderbolt III structure included two series of Fixed Rate Notes and Equity Certificates. Approximately 15.6865% of the Equity Certificates were purchased by the anchor investor which is an investment vehicle managed by ITE Management L.P. and approximately 5% of the Equity Certificates were purchased by ALC.
Proceeds from the issuance of the Notes and the Equity Certificates will be used to acquire the aircraft, fund certain accounts for the Notes and pay certain expenses.
“We are pleased to announce the closing of Thunderbolt III. This transaction allows ALC to efficiently sell 19 aircraft while retaining the customer relationships through our continued management of these aircraft. I would like to thank our team and the Thunderbolt III investors for making this a successful transaction,” said Gregory B. Willis, Executive Vice President and Chief Financial Officer of ALC.
Mizuho Securities acted as Global Coordinator, Mizuho Securities, BofA Securities and Goldman Sachs & Co. LLC acted as Joint Lead Structuring Agents and Joint Lead Bookrunners, Wells Fargo Securities acted as Joint Lead Bookrunner, and BNP PARIBAS, Citigroup, J.P. Morgan, MUFG, RBC Capital Markets, SOCIETE GENERALE and SunTrust Robinson Humphrey acted as Passive Bookrunners (for the Notes) and Co-Managers (for the Equity Certificates).
Hughes Hubbard & Reed LLP acted as U.S. counsel to ALC and the Issuers, and Milbank LLP acted as U.S. counsel to the Global Coordinator, the Joint Lead Structuring Agents and the Joint Lead Bookrunners. EY acted as U.S. and Irish tax advisors. Walkers acted as Cayman Islands counsel and A&L Goodbody acted as Irish counsel. Vedder Price P.C. acted as counsel for ITE.
Canyon Financial Services Limited will act as the managing agent for the Issuers. Citibank, N.A. will act as trustee, security trustee, paying agent and operating bank. Wells Fargo Bank, N.A. will also act as the liquidity facility provider. DealVector, Inc. will provide certain investor services for the holders of the Notes and Equity Certificates.
Sun Country Airlines,a small Minnesota-based, low-cost carrier owned by private-equity firm Apollo Global Management, plans to file for an initial public offering as soon as April, Sun Country’s CEO said Tuesday in an interview.
“Our earnings are supportive,” Jude Bricker told Skift at the International Aviation Forecast Summit in Las Vegas. “I think there’s a market for an airline that is growing.”
If Sun Country were to go public next year, it would be a fast turnaround for Apollo, which acquired the airline in December 2017. The previous owners, Mitch and Marty Davis, who also control Cambria, a maker of stone countertops, had managed Sun Country more like a family business than a medium-sized airline. Apollo has cut costs and changed the model, dropping first class, adding fees and making more it like Frontier Airlines or Spirit Airlines than an undersized competitor to Delta Air Lines or American Airlines.
SHANGHAI (Reuters) – China Southern Airlines will carry out an equity diversification plan that will involve the injection of 30 billion yuan ($4.36 billion) of capital from three investors, the firm announced on Saturday.
The Guangdong Hengjian Investment Holding Corporation, the Guangzhou Urban Construction Investment Group and the Shenzhen Penghang Equity Investment Fund will each inject 10 billion yuan into the airline, as part of the country’s efforts to diversify ownership structures among state-owned firms.
The move will significantly improve the company’s debt-to-asset ratio, generate funds for its growth and help modernize its decision-making mechanisms, the announcement said.
It will also use the funds to serve its main air transportation business, pay for construction related to China’s Belt and Road Initiative and support aviation development in cities in the southern province of Guangdong.
China Southern is one of 96 enterprises owned and administered directly by the central government. Its profits slumped nearly 50% last year as a result of rising fuel costs and a weak yuan currency.
(Reporting by David Stanway; Editing by Himani Sarkar)
Korean Air joint venture provides a strong platform for Delta growth, world-class customer benefits and revenue generation across one of the most comprehensive route networks in the trans-Pacific.
Delta has acquired a 4.3 percent equity stake in Hanjin-KAL.
Delta has acquired a 4.3 percent equity stake in Hanjin-KAL, the largest shareholder of Korean Air. The investment demonstrates Delta’s commitment to the success of its joint venture with Korean Air and the customer benefits, market positioning and growth opportunities the partnership enables. Delta intends to increase its equity stake to 10 percent over time, after receiving regulatory approval.
“Together with the team at Korean Air, we have a vision to deliver the world’s leading trans-Pacific joint venture for our shared customers, offering the strongest network, the best service and the finest experience connecting the U.S. with Asia,” said Delta CEO Ed Bastian. “This is already one of our fastest-integrating and most successful partnerships, and experience tells us this investment will further strengthen our relationship as we continue to build on the value of the joint venture.”
Delta and Korean Air operate the industry’s most robust trans-Pacific joint venture, providing customers with seamless access to more than 290 destinations in the U.S. and over 80 destinations in Asia, including the partnership’s award-winning hub at Seoul-Incheon (ICN).
Since launching in May 2018, Delta and Korean Air have strengthened cooperation by expanding joint operations in the trans-Pacific to include more than 1,400 codeshare flights, including connections throughout Asia and the U.S. Teams at both airlines have also worked closely together to provide the best travel experience for customers between the U.S. and Asia, integrate sales and marketing activities, and enhance loyalty program benefits, such as the ability to earn more miles on both loyalty programs and redeem them on a wider range of flights. Additionally, Korean Air and Delta have launched cargo cooperation across one of the most comprehensive route networks in the trans-Pacific market.
The partnership is contributing to Delta’s first year-over-year growth in the Asia Pacific region since 2012, with new service launched earlier this year between Minneapolis/St. Paul and Seoul, as well as Seattle and Osaka, operated in partnership with Korean Air. Additionally, Korean Air has launched new service linking Boston with Seoul.
The joint venture builds on nearly two decades of close partnership between Korean Air and Delta, both founding members of the SkyTeam airline alliance.
Delta is growing its international footprint and leveraging partnerships with key airlines in regions around the world, including through joint ventures and equity investments. These investments improve alignment between Delta and its partners, creating a more stable environment for growth amid an increasingly dynamic global landscape.
