Tag: rights (Page 2 of 3)

Korean Air to Issue $817 Million in New Shares as Virus Strains Industry

May 14, 2020 / WIL BALDWIN

SEOUL (Reuters) – South Korea’s largest airline, Korean Air, plans to sell around 1 trillion won ($816.55 million) in new shares in its biggest rights issue in 20 years to raise funds amid mounting strains in the industry due to the pandemic.

Korean Air is the latest carrier to raise funds as travel restrictions imposed by governments around the world have led to airlines grounding their fleets worldwide.

Korean Air separately plans to receive 1.2 trillion won in support from South Korean state-owned banks.

About 79 million newly issued shares, to be listed on July 29, will be first bought by the carrier’s shareholders, including holding company Hanjin Kal which has a 30% stake in the carrier, followed by general public, the company said in a statement.

“Korean Air will continue to carry out self-rescue measures to overcome the dismal business environment due to COVID-19,” the company said.

Korean Air had 70% or more of its employees working in South Korea take a six-month leave of absence in April. Woo Kee-hong, the airline’s president, warned in March that the coronavirus outbreak could threaten its survival if the situation becomes prolonged.

Korean Air also picked last month a preferred bidder to buy its real estate and non-core assets, which some analysts value at about 400-500 billion won.

Korean Air had a debt-to-equity ratio of about 870% as of end-2019. It is expected to announce January-March quarter earnings later this week.

A spokeswoman for Korean Air said it was operating just 10% of its previously planned international schedule, and 60% of its domestic schedule.

The airline said it expects its June international schedule to rise to 20% of its previous plan, as it announced the addition of more international passenger flights to prepare for increased travel demand once COVID-19 restrictions are relaxed.

United Airlines Holdings Inc said earlier this month it plans to raise $2.25 billion through a bond offering, after announcing a public offering to raise more than $1 billion in April.

In March, Singapore Airlines said it would issue S$5.3 billion ($3.70 billion) in new equity and up to S$9.7 billion($6.78 billion) via mandatory convertible bonds in a rights issue backed by state investor Temasek Holdings.

($1 = 1,224.6700 won)

(Reporting by Joyce Lee; Editing by Simon Cameron-Moore and Louise Heavens)

Korean Air’s passenger planes are parked following outbreak of COVID-19, at Incheon International Airport

Boeing Terminates Joint Venture Agreement With Embraer

April 27, 2020 / WIL BALDWIN

Boeing (NYSE: BA) announced today that it has terminated its Master Transaction Agreement (MTA) with Embraer, under which the two companies sought to establish a new level of strategic partnership. The parties had planned to create a joint venture comprising Embraer’s commercial aviation business and a second joint venture to develop new markets for the C-390 Millennium medium airlift and air mobility aircraft.

Under the MTA, April 24, 2020, was the initial termination date, subject to extension by either party if certain conditions were met. Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions.

“Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn’t happen,” said Marc Allen, president of Embraer Partnership & Group Operations. “It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues.”

The planned partnership between Boeing and Embraer had received unconditional approval from all necessary regulatory authorities, with the exception of the European Commission.

Boeing and Embraer will maintain their existing Master Teaming Agreement, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.

GSV Bids $2.5 Billion for Malaysia Airlines

April 7, 2020 / WIL BALDWIN

FILE PHOTO: A Malaysia Airlines plane is seen at Kingsford Smith International Airport in Sydney

KUALA LUMPUR (Reuters) – Privately held Golden Skies Ventures (GSV) has made a $2.5 billion offer to fully take over the holding company of ailing state carrier Malaysia Airlines, with financing from a European bank, its executives told Reuters on Monday.

GSV, which was set up by former Malaysia Airlines officials and professionals with aviation experience, made the proposal a month ago, as airlines around the world were hammered by travel restrictions following the coronavirus pandemic.

“We have secured in excess of $2.5 billion from the bank. We will take about three to four months to get the long-term financing,” Chief Executive Shahril Lamin told Reuters in a phone interview.

GSV said it also has a commitment from a Japanese private equity firm to inject immediate funds into the aviation group through an equity deal.

It declined to name the firms involved, adding it was in talks with other foreign banks and private equity firms for further funding.

GSV has submitted its proposal to Morgan Stanley which has been hired by the aviation group’s sole owner, sovereign wealth fund Khazanah Nasional Bhd.

Sources have previously said Japan Airlines Co Ltd, domestic carriers AirAsia Group Bhd and Malindo Air have shown interest in Malaysia Airlines.

GSV said it would assume most of the airline’s debt that is being held by the government in outstanding Islamic bonds.

Khazanah and Morgan Stanley did not immediately respond to emailed requests for comment.

GOLDEN SHARE

The proposal includes keeping the government’s so-called golden share which allows it majority voting rights and maintains Malaysia Airlines’ flag carrier status.

GSV expects it will have ample liquidity to help the airline operate comfortably for up to 18 months.

It intends to reinstate Malaysia Airlines as a premium long-haul airline by expanding its flight network and maximising utilisation of its 81-plane fleet. It also plans to keep other business units such as the budget airline, cargo freighter and maintenance repair and overhaul unit.

“It’s still a viable venture, it has inherent strengths. We are saying we won’t lay off the 13,000 frontline employees and we are not going to asset-strip the airline,” Deputy Chief Executive Ravindran Devagunam said.

The firm aims to achieve positive earnings before interest, taxes, depreciation and amortisation within three years of taking over, and targets 15 billion ringgit ($3.5 billion) in revenue in 2025.

Plans for a listing or possible listing of its units are on the cards in three to five years, they said.

Ravindran said the firm is banking on pent-up travel demand when the coronavirus is contained. “Regardless of how long (the virus) will take this year, we are looking at an uptick in the business from summer 2021.”

($1 = 4.3450 ringgit)

(Reporting by Liz Lee; Editing by David Holmes and Edwina Gibbs)

US-Bangla Airlines Adds Two ATR 72-600 Aircraft To Fleet

February 12, 2020 / WIL BALDWIN

Singapore, 12 February, 2020 – World number one regional aircraft manufacturer ATR announce that Singapore based lessor Avation PLC has converted two Purchase Rights into firm orders for two ATR 72-600 aircraft. The aircraft will be leased to Bangladeshi airline US-Bangla, the biggest private airline in Bangladesh and will support the expansion of the airline’s turboprop fleet by increasing the number of ATR aircraft from six to eight. In addition, Avation has further acquired an additional two ATR 72-600 purchase rights to replace those that were exercised.

This development will see the airline expand its operations using the most efficient and eco-responsible aircraft on the market, which burns 40% less fuel and emits 40% less CO2 than a similarly-sized regional jet. With the lowest seat mile cost in its market segment, the ATR 72-600 is the only profitable regional aircraft in low fares environments, and offers unmatched comfort in a modern, spacious cabin. Since incorporating their first ATR, the market response has been extremely good on their domestic network and their regional flights are supporting the growing Bangladeshi economy. Increasing the size of their ATR fleet also allows US-Bangla to increase their frequency on certain trunk routes, offering more choice to passengers.

Mohammed Abdullah Al Mamun, Managing Director of US-Bangla said: “Regional connectivity is essential in Bangladesh and the region. We are delighted that we can offer our passengers the chance to access new opportunities throughout the country. Operating the ATR 72-600 makes total sense in Bangladesh, we have received very good feedback from passengers and are very satisfied with the reliability and comfort of these aircraft. With the -600 series’ modern and comfortable cabin, featuring the latest 18” wide passenger seats, we are able to give our passengers a premium experience, which is essential for US Bangla.”

Executive Chairman of Avation, Jeff Chatfield, commented: “The economics of the ATR 72-600, its wide customer base and proven environmental credentials make it an extremely attractive asset for both lessors and airlines operating in all types of environments. We are glad to foster our partnership with US-Bangla and see them expand their regional footprint and develop connectivity in Bangladesh.”

Stefano Bortoli, Chief Executive Officer of ATR, remarked: “It is pleasing to have two satisfied customers at the same moment. US-Bangla are continuing to increase their fleet size, showing the unrivalled performance of the ATR in providing regional connectivity throughout Bangladesh. We continually develop our product to ensure that operators and clients are satisfied. Aircraft with high asset values are essential for lessors. So when Avation, with its market acumen and track record of placing aircraft, continues to order the ATR we know that our product is working for our customers.”

US-Bangla use their regional fleet to connect all of Bangladesh and feed their international network from Dhaka. The value of regional connectivity is proven, with a 10% increase in regional flights leading to a six percent increase in regional GDP and an eight percent increase in Foreign Direct Investment.

Air Kiribati Receives Its First Embraer E190-E2 Jet

December 30, 2019 / WIL BALDWIN

São José dos Campos, Brazil, December 30th, 2019 – Air Kiribati, the flag carrier of the Republic of Kiribati, received today its first E190-E2 jet. Embraer announced the contract with the Government of Kiribati, in partnership with its national airline, Air Kiribati, in December 2018. The airline ordered two E190-E2s and has purchase rights for two more.

“Aviation is critical for any island nation and Kiribati is no exception. Our Government has made the conscious decision to take into our hands the opportunity to unlock economic prosperity for our people and our nation through the purchase of these two aircraft,” said Hon. Willie Tokataake, Minister for Information, Communication, Transport and Tourism Development of the Kiribati Government. “The arrival of our first jet today is the culmination of three years of vision, strategic thought, government focus, research, evaluation, hard work, commitment, partnership and a good measure of problem solving.”

Air Kiribati is the launch operator for the E190-E2 in Asia Pacific. The aircraft will be configured in a dual class layout seating 92 passengers in total, with 12 seats in business class and 80 seats in economy class. Located in the central Pacific, Air Kiribati can now fly longer domestic and international routes than it currently does with its turboprop fleet.

“This is first E190-E2 delivered in the Pacific region,” said Cesar Pereira, Asia Pacific Vice President, Embraer Commercial Aviation. “We’re are honored that Air Kiribati selected the E190-E2 as the best fit for the airline’s challenging flying environment. The E190-E2 has cutting-edge technology and is the most fuel efficient and environmentally-friendly single aisle jet in the world. These attributes are extremely important for Kiribati.”

With a maximum range of up to 2,850 nautical miles, the E190-E2 can serve destinations throughout the vast expanse of Kiribati, including nonstop from Tarawa to Kiritimati (Christmas) Island, one of the most challenging routes in the Pacific. The current domestic flight from Tarawa to Kiritimati requires an international stopover in Fiji.

Spanning four time zones and comprised of more than 30 islands, Kiribati is the only country in the world to be in all four hemispheres. Embraer has been present in the Pacific since the first Bandeirante was delivered to a customer in Australia in 1978. The company continues to support operators across Oceania more than 40 years later.

The E190-E2 is the first of three new aircraft types in the E-Jets E2 family, developed to succeed the first-generation E-Jets. Compared to the first-generation E190, the E190-E2 burns 17.3% less fuel and nearly 10% less than its direct competitor. This makes it the most efficient single-aisle aircraft on the market. The E190-E2 generates significant savings for airlines in terms of maintenance costs. It has the longest maintenance intervals – 10,000 flight hours for basic checks and no calendar limit in typical E-Jets utilization. This means an additional 15 days of aircraft utilization over a period of ten years.

The E2 cockpit features advanced Honeywell Primus Epic 2 integrated avionics. Combined with closed-loop fly-by-wire controls, the systems work together to improve aircraft performance, decrease pilot workload and enhance flight safety. From a passenger perspective, the E2 cabin features a comfortable two-by-two layout. The absence of a middle seat enables passengers to have an enjoyable flight experience with more legroom and additional luggage storage space.

Embraer is the world’s leading manufacturer of commercial aircraft up to 150 seats with more than 100 customers across the world. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleets of 80 customers from 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline network carriers.

Congo Airways Signs Order with Embraer for Two E175 Jets

December 10, 2019 / WIL BALDWIN

Kinshasa, Democratic Republic of the Congo, December 10th, 2019 – Embraer and Congo Airways have signed a firm order for two E175 aircraft, with purchase rights for a further two. The deal has a total value of USD 194.4 million at current list prices with all purchase rights exercised, and will be added to Embraer’s 2019 fourth quarter backlog.

Desire Bantu, CEO of Congo Airways said, “These new jets will replace our current turboprop offering and allow us to serve routes both within the Democratic Republic of Congo, and regionally to West, Central, and Southern Africa, from our hub in Kinshasa. We will now have the flexibility and the right sized aircraft to serve our market, which is growing so rapidly an additional order may be required, for which the E2 is a particularly compelling option.”

Raul Villaron, Vice President Sales, Africa and Middle East, Embraer Commercial Aviation, said, “It’s great to welcome another airline to the Embraer family of operators, especially in Africa where the demand for regional travel is growing strongly. We look forward to supporting Congo Airways as they continue to upgrade their offering to their customers.”

The aircraft will be configured in a dual class layout seating 76 passengers in total, with 12 in business class. Deliveries will begin in the fourth quarter of 2020.

Embraer is the world’s leading manufacturer of commercial aircraft up to 150 seats with more than 100 customers across the world. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleets of 80 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline network carriers.

China’s BAIC Willing to Increase Daimler Holding after 5% Stake Buy

November 25, 2019 / WIL BALDWIN

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

Air Peace Signs a Firm Order for Three additional E195-E2 Jets

November 17, 2019 / WIL BALDWIN

Dubai, UAE, November 17th, 2019 – Embraer announced today, at the Dubai Air Show, that Air Peace, Nigeria and West Africa’s largest airline, has signed a contract for three additional E195-E2s, confirming purchase rights from the original contract, signed in April this year. These new E195-E2s will be included in Embraer’s 2019 fourth-quarter backlog and have a value of USD 212.6 million, based on Embraer’s current list prices.

Set to be the first E-Jets E2 operator in Africa, Air Peace’s firm order, announced in April this year, is now for 13 E195-E2s with 17 purchase rights for the same model. The first delivery is scheduled for the second quarter of 2020.

“The E195-E2 is the perfect aircraft to expand our operations in Africa and this new order is a further confirmation of our ‘no-city-left-behind initiative which we shall continue to execute”, said Air Peace Chairman/CEO, Mr. Allen Onyema. He added, “We are receiving impressive data about the aircraft’s economics now that is in revenue service, and this was a driver to place this new firm order with Embraer. We look forward to receiving our first aircraft, which will enhance connectivity in Nigeria and the African region, while feeding long-haul flights from our Lagos hub.”

“Air Peace will love the aircraft’s efficiency and the passenger will experience an unparalleled level of comfort, especially in first class – Air Peace is the launch customer for Embraer’s new premium staggered seating option”, said Raul Villaron, Vice President Sales, Africa and Middle East, Embraer Commercial Aviation. “We look forward to supporting Air Peace’s growing E2s fleet and to deepening our fruitful partnership.”

Air Peace subsidiary, Air Peace Hopper, started operating six ERJ145 jets last year on short thin routes. That experience with Embraer’s products and services, including the pool programme, and the undeniable economic benefits of right-sizing aircraft for the mission, was a key factor in selecting the E2.

Air Peace’s E195-E2s will be configured in a comfortable dual class arrangement with 124 seats. Air Peace operates more than 20 local, regional, and international routes and has strategic plans to expand those routes.

Embraer is the world’s leading manufacturer of commercial jets up to 150 seats. The Company has 100 customers from all over the world operating the ERJ and E-Jet families of aircraft. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 deliveries, redefining the traditional concept of regional aircraft.

KLM Firms Up Order for E195-E2 Jets, Adds Six Further Aircraft

November 12, 2019 / WIL BALDWIN

AMSTERDAM, Netherlands, Nov. 12, 2019 /PRNewswire/ — Embraer and KLM Cityhopper have signed a firm order for 21 E195-E2 aircraft, plus 14 purchase rights. The 21 firm positions will be acquired via operating lease from Embraer lessor partners Aircastle and ICBC Aviation Leasing. The order was previously announced as a Letter of Intent for 15 firm orders with 20 purchase rights at the Paris Air Show earlier this year. With all purchase rights exercised the deal would have a value of USD 2.48 billion.

The aircraft for this order will come from the existing backlogs of lessors Aircastle and ICBC Aviation Leasing; each providing KLM with 11 and 10 E195-E2s, respectively.

“KLM’s decision to add a further six aircraft to this order is a significant vote of confidence in our E2 programme”, said John Slattery, President and CEO, Embraer Commercial Aviation. “Delivering 30% lower emissions when compared to KLM’s current E190s, yet still providing a further 32 seats, the E195-E2 will simultaneously increase capacity for KLM at slot constrained Schiphol Airport, while also delivering huge reductions in emissions.”

KLM President & CEO Pieter Elbers, said, “For KLM this aircraft is a significant part of our commitment to improving our environmental impact. Not only is the E195-E2 the most fuel efficient lowest emission aircraft in its class, it is also the quietest by a considerable margin – a huge benefit for both our communities and our passengers.

KLM will configure the aircraft with 132 seats. Deliveries will begin in the first quarter of 2021.

Embraer is the world’s leading manufacturer of commercial aircraft up to 150 seats with more than 100 customers across the world. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleets of 80 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline network carriers.

Helvetic Airways Receives its First Embraer E190-E2 Jet

October 31, 2019 / WIL BALDWIN

Zurich, Switzerland, October 31st, 2019 – In ceremony held at its headquarters in Zurich, Switzerland, Helvetic Airways officially received its first E190-E2 jet from Embraer. The airline has a contract for a firm order of 12 jets of this model, and purchase rights for a further 12 E190-E2, with conversion rights to the E195-E2, bringing the total potential order up to 24 E-Jets E2s.

“As the only Swiss airline to operate Embraer aircraft, Helvetic Airways already stands out from the competition,” said Martyn Holmes, Vice President Europe, Russia & Central Asia, Embraer Commercial Aviation. “And, with our state-of-the-art E190-E2, it now has the perfect aircraft, in terms of environmental sustainability and to maximize the profitability of its flight operations.”

Helvetic Airways CEO Tobias Pogorevc is pleased to have achieved this milestone. “After more than eighteen intensive months,” he commented, “it’s a sense of accomplishment that we feel most today. With the E190-E2, Helvetic Airways is entering a truly new era. Our state-of-the-art twinjet will make us one of Embraer’s leading European operators. And it gives us just the modern and environmentally friendly aircraft we need to continue our development.”

This E190-E2 aircraft marks the start of Helvetic’s fleet renewal program. The purchase rights for a further 12 aircraft (E190-E2 or E195-E2) will enable Helvetic Airways to grow according to market opportunities. Helvetic Airways is configuring the E190-E2 in a single class layout with 110 seats and will deploy the aircraft on several domestic and international routes.

The E190-E2 is the first of three new aircraft types that make up the Embraer E2 family of aircraft, developed to succeed the first-generation E-Jets. Compared to the first-generation E190, the E190-E2 burns 17.3% less fuel and nearly 10% less than its direct competitor. This makes it the most efficient single-aisle aircraft on the market. The E190-E2 brings more flexibility with maximum range of up to 3,293 miles (5,300 km), about 621 miles (1,000 km) more than the first-generation E190.

The E190-E2 also generates significant savings for airlines in terms of maintenance costs. It has the longest maintenance intervals with 10,000 flight hours for basic checks and no calendar limit in typical E-Jets utilization. This means an additional 15 days of aircraft utilization over a period of ten years.

Pilots of the first-generation E-Jets require only two-and-a-half days of training without the need for a full flight simulator in order to fly the E2, which decreases the training burden and saves both time and money for the airlines. The E2 cockpit features advanced Honeywell Primus Epic 2 integrated avionics. Combined with the closed-loop fly-by-wire controls, the systems work together to improve aircraft performance, decrease pilot workload and enhance flight safety.

From the passenger’s perspective, the E2 cabin features a comfortable two-by-two layout. The absence of a middle seat enables passengers to have an enjoyable flight experience with more legroom and additional luggage storage space.

Embraer is the world’s leading manufacturer of commercial aircraft up to 150 seats with more than 100 customers across the world. For the E-Jets program alone, Embraer has logged more than 1,800 orders and 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleets of 80 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline network carriers.

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