SEOUL, March 26 (Reuters) – South Korea’s National Pension Service (NPS) will vote for Hanjin Group chairman Walter Cho to keep his board seat in Korean Air’s parent firm Hanjin Kal at a shareholders’ meeting on Friday, the fund said.
In a statement on Thursday, NPS said it would also approve a board seat for telecoms industry veteran Kim Shin-bae, who was nominated by Cho’s sister and an activist fund that opposed Walter Cho.
Hanjin Kal’s annual general meeting is expected to be the culmination of an intense proxy fight to decide the group’s leader.
NPS, the world’s third-largest pension fund, had a stake of 2.9% stake in Hanjin Kal by the end of 2019.
(Reporting by Joyce Lee; Editing by Clarence Fernandez)
PARIS (Reuters) – Airbus <EADSY> said in a stock market filing on Monday that customers could seek to cancel or postpone delivery of airliners and helicopters as the coronavirus crisis continues to escalate.
It issued the warning in an annual reference document ahead of its upcoming Amsterdam shareholder meeting, for which it urged participants to vote by proxy rather than attend in person due to widespread measures to slow the spread of the disease.
Airbus Chief Executive Guillaume Faury said earlier that several airlines had asked to defer deliveries, but that most were continuing to pay their deposits.
“Weaker market and economic conditions in China and their knock-on effects in other markets could result in requests by customers to postpone delivery or cancel existing orders for aircraft (including helicopters),” the filing said, though Faury said earlier there were some signs of recovery in China.
Airbus also detailed steps to improve compliance practices after paying a 3.6-billion-euro fine last month to settle a four-year multinational bribery probe.
But it warned that possible further investigations in other jurisdictions could trigger claims against it by shareholders, impact its ability to raise finance or limit its eligibility for public contracts, as well as harm future commercial sales.
Malaysian authorities last week cleared AirAsia Group <5099.KL> after Britain’s Serious Fraud Office faulted a sponsorship deal between former Airbus parent EADS and a motor racing team owned by the airline’s co-founders.
But the SFO probe, supported by Airbus’s own lawyers, caused a severe rift between AirAsia and its sole supplier, adding to doubts over whether long-haul unit AirAsiaX will take delivery of A330neo jets on order, three people close to the matter said.
AirAsia officials could not be reached for comment. Airbus declined comment.
Loss-making AirAsiaX has said only that it wants to defer delivery of A330neo jets due to the coronavirus crisis.
Deliveries of the wide-body aircraft have also been hit by the impact of U.S. tariffs on Airbus aircraft under a long-running trade dispute, as well as concerns about overcapacity.
Airbus trimmed A330 output in January from about four a month in 2019, Reuters reported earlier this month.
In Monday’s filing, Airbus said it would maintain production of the A330neo at 3.5 aircraft a month.
(Reporting by Tim Hepher; Editing by Mark Potter, William Maclean)
A step-change acquisition to address the ever-increasing demand for sustainable mobility
Excellent strategic rationale bringing to Alstom: – Strong commercial and product complementarities – Strengthened product lines and strategic industrial capacity – Leading portfolio offering and R&D capabilities
Acquisition price from €5.8bn to €6.2bn
CDPQ to become the largest shareholder of Alstom with c.18% of the capital
Alstom announces today that it has signed a Memorandum of Understanding with Bombardier Inc. and Caisse de dépôt et placement du Québec (“CDPQ”) in view of the acquisition of Bombardier Transportation. Post-transaction, Alstom will have a backlog of around €75bn and revenues around €15.5bn. The price for the acquisition of 100% of Bombardier Transportation shares will be €5.8bn to €6.2bn which will be paid via a mix of cash and new Alstom shares. CDPQ will reinvest c.€2bn corresponding to 100% of cash proceeds to be received from the sale of its stake in Bombardier Transportation and further invest €0.7bn in Alstom, outlining its strong belief in the strategic rationale and value creation potential of the combination.
“I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market. This acquisition will improve our global reach and our ability to respond to the ever-increasing need for sustainable mobility. Bombardier Transportation will bring to Alstom complementary geographical presence and industrial footprint in growing markets, as well as additional technological platforms. It will significantly increase our innovation capabilities to lead smart and green innovation. We will be thrilled to welcome all the talent and energy of Bombardier Transportation employees. We are deeply committed to step up the turnaround of Bombardier Transportation activities and deliver significant value to all stakeholders, particularly our customers. We will also further develop Bombardier Transportation’s historical presence in Québec, drawing on Québec’s well-established strengths in innovation and sustainable mobility. We are pleased to welcome CDPQ as a new long-term shareholder. CDPQ is fully supportive of the transaction and Alstom’s strategy.” said Henri Poupart-Lafarge, Chairman and CEO of Alstom.
A step-change acquisition
Alstom and Bombardier operate in a very positive market environment with passenger traffic expected to grow between 3% to 5% annually over the 2015-2025 period and global rail OEM market expected to achieve a +3.0% CAGR between 2021-2023. The dynamic is driven by urbanisation trend and a strong push for decarbonation of mobility. In Europe, the European Commission has set very ambitious targets in terms of CO2 reduction and several countries have announced large investments in rail.
Alstom is a preeminent rail equipment player with an industry-record backlog of €40bn and €8.1bn of annual sales as of 31-Mar-2019. Over the period 2016-2019, Alstom delivered strong sales development with an average annual growth of 5.5% outperforming the market, and significantly improved profitability (up to 7.5% adjusted EBIT margin).
Bombardier Transportation is a reference player in global rail transportation with a €32bn backlog and €7.4bn sales as of December 2019. With a track record of market leadership and a strong expertise, Bombardier Transportation offers a broad product portfolio across all market segments and has a well-balanced industrial footprint between best-cost and high-tech countries.
FORT WORTH, Texas — American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2019 financial results, including these highlights:
Fourth-quarter 2019 earnings were $0.95 per diluted share. Excluding net special items1, earnings were $1.15 per diluted share, up 19% year over year.
Full-year 2019 earnings were $3.79 per diluted share. Excluding net special items2, earnings were $4.90 per diluted share, up 8% year over year.
Accrued $213 million for the company’s profit-sharing program in 2019, including $74 million in the fourth quarter.
Returned $1.3 billion to shareholders in the form of dividends and share repurchases in 2019.
“During the fourth quarter, we made important progress to address the issues that impacted our business in 2019, and, thanks to our incredible team, we ended the year with our strongest operational quarter on record,” said American Airlines Chairman and CEO Doug Parker.
“While our results for the quarter reflect this progress, we know there is more work to be done. Looking to 2020, we are focused on three key areas. First, we will continue to deliver operational excellence and build on our strong fourth-quarter results. Our team has done a tremendous job, and we will keep driving improvement in key operational metrics in the year ahead. Second, we will deliver those results while growing where we have a competitive advantage in our most profitable hubs. And third, these initiatives combined with our capital plan will enable us to drive significant free cash flow in 2020 and beyond.”
Fourth-Quarter Revenue and Expenses
Pre-tax earnings were $571 million in the fourth quarter of 2019. Pre-tax earnings excluding net special items for the fourth quarter of 2019 were $679 million, a $90 million increase from the fourth quarter of 2018, or 15.1% year-over-year increase from the same period last year.
Continued strength in passenger demand and a record passenger load factor drove a 3.4% year-over-year increase in fourth-quarter 2019 total revenue to a record $11.3 billion. Driven by a 2.4% increase in passenger load factor, passenger revenue per available seat mile (PRASM) grew 0.9% to 14.72 cents, a record for the fourth quarter. Cargo revenue was down 18.3% to $216 million due primarily to a 15.6% decline in cargo volume. Other revenue was up 5.4% to $750 million due primarily to higher loyalty revenue. Fourth-quarter total revenue per available seat mile (TRASM) increased by 0.5% compared to the fourth quarter of 2018 on a 2.9% increase in total available seat miles.
Total fourth-quarter 2019 operating expenses were $10.6 billion, up 2.1% year over year, driven primarily by higher salaries and benefits, maintenance, and regional expenses. Total fourth-quarter 2019 cost per available seat mile (CASM) was 15.06 cents, down 0.8% from fourth-quarter 2018. Excluding fuel and net special items, consolidated fourth-quarter CASM was 11.59 cents, up 2% year over year.1
2020 Priorities
In 2020, American is focused on operational excellence, efficient and profitable growth, and generating significant free cash flow.
Operational excellence: Running a reliable operation is a significant driver of customers’ likelihood to recommend and American’s goal to become customers’ airline of choice.
Efficient and profitable growth: Grow in high-revenue markets that produce at or above average unit revenues, largely due to new gates in Dallas-Fort Worth and Charlotte, North Carolina.
Generating significant free cash flow3: Use free cash flow to naturally de-lever the company’s balance sheet and return capital to American’s shareholders.
El Al Israel Airlines is outsourcing operation of its main freighter route between Tel Aviv and Liege, Belgium, to Atlas Air Inc. under an extended charter arrangement.
Atlas, an aviation services company headquartered in Purchase, N.Y., said Tuesday it is leasing El Al a Boeing 747-400 all-cargo aircraft, operating it with its own crew and providing maintenance and insurance (ACMI) beginning this month.
El Al, a new customer for Atlas, is experiencing strong growth in demand across its freight network, according to the announcement. The Israeli carrier sells the space on the plane and covers expenses such as ground handling, landing fees and fuel.
No terms of the commercial cooperation were disclosed, but ACMI deals typically run for one to three years.
HONG KONG, Dec 2 (Reuters) – Cash-strapped Chinese conglomerate HNA Group said on Monday it has agreed a deal to restructure its low-cost carrier West Air with a Chongqing-based asset management firm.
Chongqing Yufu Asset Management Group and its affiliates will together hold at least 70% stake in West Air, becoming the biggest shareholder, HNA said in a statement.
West Air, established in 2007, operates about 160 domestic and international routes with a fleet of 35 airplanes.
It has been directly controlled by HNA, whose affiliates also own struggling Hong Kong Airlines as well as Hainan Airlines Holding Co Ltd.
Budget carrier Hong Kong Airlines was ordered by Hong Kong’s air transport regulator on Monday to shore up its financial position by Dec. 7 or risk the suspension or loss of its licence.
Hainan Airlines, which has seen declining profits, said in a Shanghai stock exchange filing on Monday that it will seek 4 billion yuan ($568 million) in loans from eight banks led by China Development Bank.
The funds will be used to cover the costs of fuel, maintenance charges, staff salaries and operational expenses, it said in the filing.
$1 = 7.0389 Chinese yuan renminbi
Reporting by Meg Shen; Editing by Edmund Blair and Susan Fenton
FILE PHOTO: A model of the Airbus A220-300 aircraft is seen at a media event at Indira Gandhi International Airport in New Delhi
OTTAWA (Reuters) – Airbus SE’s <EADSY> Canadian-designed A220 narrowbody jet has the potential to be stretched to carry more passengers but the company has no current plans to do so, a top executive said on Tuesday.
Air France KLM SA <AFLYY>, which has a firm order for 60 A220 jets, has expressed interest in a larger variant of the plane. The A220-100 model can carry from 100-120 passengers while the larger A220-300 takes from 120-150.
In a presentation to investors, Air France KLM last week posted a slide referring to a larger A220-500 plane.
“It’s no secret that the aircraft has potential to be stretched, potential to grow,” said Philippe Balducchi, head of an Airbus-led venture which took over production of the airliner in July 2018.
Airbus’ first responsibility was to make sure the two existing planes become established in the marketplace, he told Reuters on the sidelines of an aviation conference. After that the firm would decide how to develop its planes.
“Will (there) be an A220-500 or not? I cannot tell you that today. It’s definitely not my priority but there is the potential – we will see,” said Balducchi.
Montreal-based Bombardier <BDRBF> originally drew up designs for the airliner some 15 years ago but sold Airbus a 50.01 percent stake for a token fee of one Canadian dollar in 2018 after sluggish sales and low production rates pushed the program well over budget.
Balducchi sidestepped questions as to whether Airbus would buy Bombardier’s 33.58% minority stake, saying that was a decision for shareholders.
“I think Airbus is comfortable with the situation today,” said Balducchi.
Under the terms of the 2018 deal, Bombardier could oblige Airbus to acquire its stake in the program in 2026 for market value. Airbus could also oblige Bombardier to sell the stake.
Bombardier Chief Executive Alain Bellemare recently said the company is “looking at all options” regarding its stake, while specifying that such a decision “is not for today.”
The Canadian province of Quebec continues to hold a 16.41% stake in the program.
(Additional reporting by Allison Lampert in Montreal; Editing by Sonya Hepinstall)
• Embraer delivered 26 commercial and 25 executive (19 light and 6 large) jets during 2Q19, compared to 28 commercial jets and 20 executive (15 light and 5 large) jets in 2Q18
• The Company’s firm order backlog at the end of 2Q19 was US$ 16.9 billion, up from the US$ 16.0 billion reported at the end of 1Q19. Embraer achieved book-to-bills of above 1x in each of its major business units during the quarter, led by sales performance in the Executive Jets segment
• EBIT and EBITDA in 2Q19 were US$ 26.6 million and US$ 67.0 million, respectively, yielding EBIT margin of 1.9% and EBITDA margin of 4.9%. In the first six months of 2019 the Company’s EBIT was US$ 11.4 million (EBIT margin of 0.5%) and EBITDA was US$ 97.9 million (EBITDA margin of 4.4%)
• 2Q19 Net income attributable to Embraer shareholders and Earnings per ADS were US$ 7.2 million and US$ 0.04, respectively. Adjusted net loss (excluding deferred income tax and social contribution) for 2Q19 was US$ (13.9) million, with Adjusted loss per ADS of US$ (0.08). Embraer reported adjusted net loss in 2Q18 of US$ (0.4) million, for an adjusted loss per ADS of US$ (0.002) in the quarter
• Embraer reported 2Q19 Free cash flow of US$ 1.5 million, versus free cash flow of US$ 43.3 million reported in 2Q18. The Company expects free cash flow generation to improve in the second half of the year given higher expected aircraft deliveries and cash inflows related to Defense & Security contracts
• The Company finished the quarter with total cash of US$ 2,478.8 million and total debt of US$ 3,569.1 million, yielding a net debt position of US$ 1,090.3 million at the end of 2Q19
• The Company reaffirms all aspects of its 2019 financial and deliveries guidance.
PROVIDENCE, R.I.–(BUSINESS WIRE)– Textron Inc. (NYSE: TXT) today announced that it is reviewing strategic alternatives for its Kautex business unit, which produces fuel systems and other functional components. Textron plans to consider a range of options, including a sale, tax-free spin-off or other transaction. Kautex operates over 30 plants in 14 countries and generated over $2.3 billion in revenue in 2018.
Kautex, headquartered in Bonn, Germany, is a leading developer and manufacturer of blow-molded plastic fuel systems and advanced fuel systems for cars and light trucks, including pressurized fuel tanks for hybrid applications. The unit also develops and manufactures camera/sensor cleaning solutions for automobiles, selective catalytic reduction systems used to reduce emissions from diesel engines as well as produces cast iron engine camshafts, crankshafts and other engine components.
“Kautex is a leading Tier One supplier to global OEMs. It has a long history of product innovation, world-class operations and strong financial performance,” said Scott C. Donnelly, Textron Chairman and Chief Executive Officer. “We are exploring strategic alternatives to see how we can position Kautex to best serve its customers for ongoing success while simultaneously unlocking potential value for our shareholders.”
No decision has been made and there can be no assurance that the process will result in any transaction being announced or completed in the future. The Company has not set a definitive timetable for completion of its review of strategic alternatives and does not intend to make any further announcements related to its review unless and until its Board of Directors has approved a specific transaction or the Company otherwise determines that further disclosure is appropriate.
Textron has retained Goldman Sachs & Co. LLC as financial advisor to assist in its review.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com
MHI now positioned to transform and lead the underserved regional jet business, with bolstered customer support services
Key step in MHI’s strategy of expanding its aircraft business globally, with a mid-term focus on North America
Completes Bombardier’s aerospace transformation and refocus on business aviation
Mitsubishi Heavy Industries, Ltd (MHI) (TOKYO:7011) and Bombardier Inc (TSX: BBD.B) announced today they have entered into a definitive agreement, whereby MHI will acquire Bombardier’s regional jet program for a cash consideration of $550 million USD, payable to Bombardier upon closing, and the assumption by MHI of liabilities amounting to approximately $200 million USD. Under the agreement, Bombardier’s net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which is valued at approximately $180 million USD, will be transferred to MHI.
Pursuant to the agreement, MHI will acquire the maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft, including the related services and support network located in Montréal, Québec, and Toronto, Ontario, and its service centres located in Bridgeport, West Virginia, and Tucson, Arizona, as well as the type certificates.
This acquisition is complementary to MHI’s existing commercial aircraft business, in particular the development, production, sales and support of the Mitsubishi SpaceJet commercial aircraft family. The maintenance and engineering capabilities of the CRJ program will further enhance critical customer support functions, a strategic business area for MHI in the pursuit of future growth.
Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries Ltd., commented: “As we outlined during the recent Paris Air Show, we are working hard to ensure that we provide new profit potential for airlines and set a new standard for passenger experience. This transaction represents one of the most important steps in our strategic journey to build a strong, global aviation capability. It augments these efforts by securing a world-class and complementary set of aviation-related functions including maintenance, repair and overhaul (MRO), engineering and customer support.”
Izumisawa concluded, “The CRJ program has been supported by tremendously talented individuals. In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family. MHI has a decades-long history in Canada, and I hope this transaction will result in the expansion of our presence in the country, and will represent a significant step in our growth strategy.”
“We are very pleased to announce this agreement, which represents the completion of Bombardier’s aerospace transformation,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are confident that MHI’s acquisition of the program is the best solution for airline customers, employees and shareholders. We are committed to ensuring a smooth and orderly transition.”
Bellemare continued: “With our aerospace transformation now behind us, we have a clear path forward and a powerful vision for the future. Our focus is on two strong growth pillars: Bombardier Transportation, our global rail business, and Bombardier Aviation, a world-class business jet franchise with market-defining products and an unmatched customer experience.”
The CRJ production facility in Mirabel, Québec will remain with Bombardier. Bombardier will continue to supply components and spare parts and will assemble the current CRJ backlog on behalf of MHI. CRJ production is expected to conclude in the second half of 2020, following the delivery of the current backlog of aircraft.
Bombardier will also retain certain liabilities representing a
portion of the credit and residual value guarantees totaling
approximately $400 million USD. This amount is fixed and not subject to
future changes in aircraft value, and payable by Bombardier over the
next four years.
The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.
The agreement contemplates a reverse break fee payable by MHI under certain circumstances.
About MHI
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, is one of the world’s leading industrial firms with 80,000 group employees and annual consolidated revenues of around US$38 billion. For more than 130 years, the company has channeled big thinking into innovative and integrated solutions that move the world forward. MHI owns a unique business portfolio covering land, sea, sky and even space. MHI delivers innovative and integrated solutions across a wide range of industries from commercial aviation and transportation to power plants and gas turbines, and from machinery and infrastructure to integrated defense and space systems.
With over 68,000 employees, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries as well as a broad portfolio of products and services for the business aviation, commercial aviation and rail transportation markets. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
Bombardier and CRJ are trademarks of Bombardier Inc. or its subsidiaries
