Tag: iag (Page 3 of 4)

Rolls-Royce Quits Boeing’s Mid-Market Engine Race

February 28, 2019 / WIL BALDWIN

LONDON (Reuters) – Rolls-Royce dropped out of the race to power Boeing’s planned mid-market aircraft on Thursday, saying it did not want to risk more disruption for its airline customers by rushing out a product without extensive testing.

The move strengthens a leading position in the high-profile contest already held by a transatlantic venture involving Rolls’ arch-rival General Electric, industry sources said,

Britain’s Rolls-Royce, which makes engines for large civil aircraft and military planes, wants to avoid a repeat of the problems with its Trent 1000 engine that powers Boeing’s Dreamliner 787.

Chief Executive Warren East said he had taken the “very difficult decision” to withdraw from the Boeing competition because it couldn’t make the development of its new UltraFan architecture fit the timetable for the aircraft.

Boeing has proposed launching a new mid-sized jetliner to fill a gap between the narrow and wide-body aircraft, with airline operations beginning in 2025.

“If you enter into service with an engine that is not sufficiently mature, then you are almost inevitably going to run into lots of in-service issues, lots of customer disruption and lots of incremental costs,” East told reporters.

He said, however, that Rolls was still committed to UltraFan, a major new fuel-efficient architecture that will power wide-body jets towards the back end of the next decade.

CFM International — a joint venture between GE and France’s Safran — as well as Pratt & Whitney are also potential suppliers for the new Boeing jet.

Pratt & Whitney recently re-entered the civil market for narrow-body jets and wants to expand to larger ones, but has been hit by industrial problems.

UNHAPPY CUSTOMERS

In the nearer term, Rolls is still dealing with the costs and disruption of fixing Trent 1000 engines caused by the poor durability of components.

“On this issue we have indeed turned the corner,” East said, although he added that the level of customer disruption was still unacceptable.

It raised the Trent 1000 charge to 790 million pounds from 554 million pounds at the half year, contributing to a full-year operating loss of 1.16 billion pounds ($1.54 billion), and allocated another 100 million pounds in cash to the problem.

The issue has damaged Rolls’ standing with its big customers.

British Airways owner IAG said on Thursday it would order 18 Boeing 777-9s, rather than a competing package from Airbus that industry sources said included the A350, which is powered by Rolls.

“I have been frustrated, largely with the performance of Rolls-Royce, not so much with Airbus,” IAG Chief Executive Willie Walsh said.

East, however, said Rolls had an excellent relationship with BA and put the choice down to IAG’s fleet requirements.

“I am totally confident we will be continuing to be a major partner with BA for many, many years into the future,” he said.

East said that aside from Trent 1000, the rest of the business was performing well, although the large engine deliveries of 480 fell short of its 500 target, in part due to the challenge of stepping up Trent 7000 production.

Shares in Rolls were trading down 3.4 percent at 950 pence, underperforming a 1 percent drop in the FTSE 100.

The company reported a 8 percent rise in underlying revenue to 15.1 billion pounds and a doubling of operating profit to 616 million pounds.

However, changes in Rolls-Royce’s dollar-pound hedge book had a significant impact on its results, and were in part responsible for a reported full-year loss of 2.9 billion pounds.

(Reporting by Paul Sandle, Additional reporting by Tim Hepher; Editing by Edmund Blair and Keith Weir)

BA Owner IAG Expects No Earnings Growth in 2019

February 28, 2019 / WIL BALDWIN

LONDON, Feb 28 (Reuters) – British Airways owner IAG said it expected earnings in 2019 to be flat after it weathered the impact of rising fuel costs and air traffic control disruption to meet expectations for its 2018 results on Thursday.

IAG reported a 9.5 percent rise in operating profit before exceptional items for the year to December 31 to 3.23 billion euros, but said there would be no growth in 2019 as earnings would be in line with the previous year’s results.

“This was a very good performance despite three significant challenges: fuel prices increasing 30 percent, considerable Air Traffic Control disruption and an adverse foreign exchange impact of 129 million euros,” Chief Executive Willie Walsh said.

IAG said that passenger revenue rose 6.2 percent across the group, with passenger unit revenue up 2.4 percent.

In a separate statement, IAG said it would order 18 Boeing 777-9s and options for 24 more for British Airways to replace 14 747-400s and four 777-200s between 2022 and 2025.

(Reporting by Alistair Smout, editing by James Davey)

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. The company operates under the British Airways, Iberia, Vueling, LEVEL, IAG Cargo, Avios, and Aer Lingus brands.

Norwegian Air Owners Approve Discount Share Sale

February 19, 2019 / WIL BALDWIN

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)

18 REASONS TO FLY WITH BRITISH AIRWAYS IN 2019

February 5, 2019 / WIL BALDWIN

British Airways’ new year’s resolution is to provide its customers with even more quality and choice in every cabin on every route – with a £6.5bn investment and 18 great reasons to look forward to flying with the airline in 2019.

Here are some of the reasons to fly with British Airways this year:

New routes. Customers can try out the airline’s new routes to Charleston y’all, with Pittsburgh, Osaka, Kos and Corsica, Ljubljana, Montpellier, among others. It’s the airline’s most extensive route network in more than a decade.
New aircraft. Customers can fly on one of the carrier’s 15 plush new aircraft being delivered this year – including four fabulous A350 aircraft.
A brand-new Club World seat, featuring on the new A350 aircraft, and two 777 aircraft by the end of the year.
WiFi. The best, live streaming WiFi on all short-haul flights and the vast majority of long-haul flights so customers can sit back and enjoy films and TV shows from their favourite streaming service.
A new look for First. New first-class dining, bedding and amenity kits from one of the UK’s best-loved designers.
An industry-leading makeover for World Traveller Plus. Look out for new bedding and new dining in this intimate and exclusive cabin.
New lounges for customers to relax and enjoy ahead of their flight, in San Francisco, Johannesburg, Geneva and JFK.
An extended partnership with premium dining supremo Do&Co, the airline’s new in-flight caterer from Heathrow and already providing meals in Club Europe.
A new ba.com homepage, making booking with British Airways even easier and more intuitive.
New partners for the British Airways Executive Club, offering even more ways to collect and spend Avios.
Digital bag tags. A UK airline first. Sync your personal baggage tag with the BA app, drop your luggage at the airport, and fly.
Self-service baggage drops at Heathrow T3 offering customers the same service as T5.
Facial recognition technology. More biometric technology at Heathrow, London City and Gatwick, New York JFK, Orlando, Los Angeles, Miami and many more. The system makes boarding faster and more convenient, helping British Airways depart flights on, or ahead of time.
New emissions-free, remote-controlled pushback vehicles for long-haul aircraft to continue to improve punctuality. Short-haul versions reduced pushback delays by more than 70 per cent.
New winter equipment – helping British Airways safely de-ice its fleet of almost 300 aircraft quicker than ever during the frosty winter months.
Hotel reservations. Investment in new technology will see rooms automatically booked for customers who miss their flights due to disruption.
Enhanced customer service. Almost 30,000 staff will receive the airline’s all-new customer service training. At T5 – more airport hosts than ever before are being re-trained to manage any customer issue, from re-booking to upgrades, lounge access, baggage and transfer queries and flight information.
And last but not least – look out for British Airways’ Centenary celebrations. It’s going to be 100 years’ old this year, and will be celebrating in style, sharing its heritage and looking at what to expect from flying in the future.

A British Airways 787 Dreamliner G-BBJA flying over Derby ‘s Rolls Royce sites.

Story and image from http://www.britishairways.com

IAG Rules Out New Bid for Norwegian Air

January 24, 2019 / WIL BALDWIN

LONDON/OSLO (Reuters) – British Airways owner IAG (ICAG.L) said on Thursday it would not make a new bid for Norwegian Air (NWC.OL) and would sell its remaining stake in the budget airline, sending Norwegian’s shares sharply lower.

Shares in Norwegian, which has been under pressure over the past 18 months to control costs and shore up its balance sheet, dropped as much as 26 percent after IAG’s statement to hit their lowest since November 2012.

“International Airlines Group (IAG) confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA and that, in due course, it will be selling its 3.93 percent shareholding in Norwegian,” IAG said in a statement.

IAG’s shares turned positive after its statement, and were up 1.5 percent at 1305 GMT.

Norwegian, which has shaken up long-haul rivals by offering cut-price transatlantic fares, said in May it had received two conditional proposals for a full takeover from IAG, but had rejected them because they undervalued the company.

IAG CEO Willie Walsh last year ruled out launching a hostile takeover approach for Norwegian, and also said he wouldn’t get drawn into a bidding war. In addition to British Airways, IAG also owns Iberia, Vueling and Aer Lingus.

A spokeswoman for IAG declined to give further details on the decision not to pursue Norwegian further, but said “we wish Norwegian every success in the future”.

NO MARGIN OF ERROR

“Norwegian’s plans and strategy remain unchanged. The company’s goal is to continue building a sustainable business to the benefit of its customers, employees and shareholders,” Chairman Bjoern Kise said in a statement.

Norwegian has quickly built its long-haul route network, and in October overtook IAG’s British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area.

But the Nordic carrier has had to take action to improve its financial position in recent months. In December, it announced a $230 million cost savings programme and refinanced one Boeing (BA.N) 787 Dreamliner as part of a series of steps it said would generate more than $30 million in liquidity.

“Norwegian’s finances are already under pressure, and a share sale (by IAG) will put pressure on the stock, making it hard for them to raise money,” analyst Per Hansen of brokerage Nordnet said in a note to clients.

“They no longer have any margin of error. If they were to need cash, and no alternative buyers emerge, the stock price could end up looking like a jetliner running out of fuel.”

(Reporting by Alistair Smout in London and Terje Solsvik in Oslo, additional reporting by Helen Reid in London and Stine Jacobsen in Copenhagen, Editing by Paul Sandle and Mark Potter)

Spain Says Iberia Meets EU Airline Rules if No-Deal Brexit

January 10, 2019 / WIL BALDWIN

MADRID (Reuters) – The Spanish government is confident national flag carrier Iberia will be able to fly across Europe in the event of a disorderly Brexit, even though the airline is majority-owned by Britain-based Anglo-Spanish group IAG (ICAG.L).

Britain is due to leave the European Union on March 29 but has yet to seal a withdrawal agreement, posing a potential risk to airlines that don’t meet EU rules requiring European carriers to be majority-owned and operated in the bloc.

“From the public works ministry’s point of view, we’re convinced that Iberia is a Spanish company,” a spokesman for the ministry told Reuters.

“We are also convinced that, if necessary, the company will make the necessary adjustments to make sure it complies with European regulations,” he said.

Iberia carries 19 million passengers a year and is a major employer in Spain with almost 17,000 workers.

IAG, which also owns British Airways, is registered in Spain but headquartered in Britain and has shareholders from around the world. Iberia has a Spanish shareholder with just over 50 percent of voting rights via a complex ownership scheme.

“We are confident that we will comply with the EU and the UK ownership and control rules post-Brexit,” IAG said, adding that IAG was a Spanish company.

The Financial Times reported on Tuesday that Brussels had doubts about IAG’s arguments that its individual airlines are domestically owned.

European Commission sources told Reuters that Brussels encouraged IAG and all airlines concerned to check with the national licensing authorities whether they would still meet the operating licence requirements in case of a “no deal” Brexit.

They said the Commission was in regular contact with the national authorities that review compliance.

While IAG wholly owns the economic rights of Iberia Holdings, it holds just 49.9 percent of voting rights. Garanair, wholly owned by Spain’s retail giant El Corte Ingles, has the remaining 50.1 percent voting stake.

(By Belén Carreño. Additional reporting by Jan Strupczewski; Writing by Andrei Khalip; Editing by Mark Potter)

Image from http://Iberia.com

Icelandair Agrees To Buy Rival WOW Air

November 7, 2018 / WIL BALDWIN

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Image from www.boeing.com

IAG’s Aer Lingus Boss Stephen Kavanagh To Step Down

October 11, 2018 / WIL BALDWIN

(Reuters) – International Airlines Group (IAG) (ICAG.L) said on Thursday that Aer Lingus chief executive Stephen Kavanagh will step down on Jan. 1, 2019 and will be succeeded by Sean Doyle, a British Airways director.

Kavanagh, who will remain with Aer Lingus as a non-executive director, is stepping down to pursue other interests, after a career that spanned over three decades at the Irish airline, with the last four in the top job.

IAG Chief Executive Willie Walsh credited Kavanagh with modernizing Aer Lingus, the flag carrier of Ireland founded by the government in 1936.

Doyle, who hails from Cork, Ireland, is also the director of network, fleet and alliances at IAG-owned British Airways.

IAG also said Mike Rutter, chief operating officer of Aer Lingus, has extended his contract with the airline.

(Reporting by Shariq Khan in Bengaluru; Editing by Kirsten Donovan and Emelia Sithole-Matarise)

In other Aer Lingus news:

Meet Montreal and Minneapolis-St. Paul

Minnesota’s twin cities, Minneapolis-St. Paul, join Montreal, the largest city in Canada’s Québec province, as the latest additions to our expanding transatlantic network.

Ireland’s first direct Minneapolis-St. Paul service will operate daily from 8th July 2019, with fares from €249 each way, as part of a return trip.

Our new daily Montreal route will take off on 8th August 2019, with fares from €239 each way, as part of a return trip.

British Airways Loses New York Crown To Norwegian

October 8, 2018 / WIL BALDWIN

LONDON (Reuters) – Norwegian Air Shuttle (NWC.OL) has overtaken British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area, in the latest illustration of the low cost carrier’s move into British Airways territory.

Norwegian carried 1.67 million passengers to or from airports in the New York area in the 12 months to the end of July, compared with the 1.63 million carried by British Airways, data from the Port Authority of New York & New Jersey showed.

No-frills carrier Norwegian has been rapidly expanding in the transatlantic market over the last five years, prompting the owner of British Airways, IAG (ICAG.L), to try to buy it earlier this year.

The data showed four U.S. airlines, led by United, are the biggest carriers of international passengers out of the main airports in the New York area, which include John F. Kennedy International, LaGuardia and Newark Liberty International.

Air Canada is the biggest non-U.S. carrier of international passengers, but its dominance is on travel between the United States and Canada.

Norwegian, and other relatively recent entrants to the market such as Wow Air, have led a charge to shake up Europe’s long-haul flight market, offering ticket prices that can be as little as half those charged by traditional carriers.

The traditional airlines have responded by selling a new budget class of ticket, as well as setting up, in IAG’s case, new airline Level to compete directly with Norwegian on price.

Lufthansa has also started budget long-haul flights using its Eurowings brand.

Norwegian said in May it had rejected two approaches from IAG, which also owns the Iberia, Aer Lingus and Vueling brands, because they undervalued the company. IAG owns a 4.6 percent stake in Norwegian.

The pace of Norwegian’s growth – figures from July 2017 show it only carried 750,000 passengers into and out of the New York region – has weighed on its finances and it faces mounting pressure to control costs and shore up its balance sheet.

British Airways did not immediately respond to a request to comment on the figures.

(Reporting by Sarah Young; Editing by Mark Potter)

Will IAG buy Norwegian

April 12, 2018 / WIL BALDWIN

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

By Sarah Young

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

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

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

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

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

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

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

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

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

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

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

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

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

NORWEGIAN UNDER PRESSURE

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

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

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

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

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

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

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

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

Kjos was not available for comment when contacted by Reuters.

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

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

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

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

($1 = 7.7844 Norwegian crowns)

($1 = 0.7043 pounds)

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

Meet Montreal and Minneapolis-St. Paul

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