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
SYDNEY (Reuters) – Hong Kong carrier Cathay Pacific Airways Ltd <CPCAY> plans to cut passenger flight capacity by 1.4% next year, reversing an earlier plan for a boost of 3.1% because of a challenging business outlook, an internal memo reviewed by Reuters showed.
The capacity reduction follows Cathay Pacific cutting its second-half profit guidance earlier this month, the second cutback in less than a month, because of anti-government protests that began in Hong Kong in June that have discouraged travel to the city.
“Given the immediate commercial challenges and the fact that our position has deteriorated in recent weeks, we must take swift action to adjust our budget operating plan for 2020 downwards again,” Chief Executive Augustus Tang said in the memo.
“Put another way, rather than growing our airlines in 2020, for the first time in a long time, our airlines will reduce in size.”
Revenue performance continues to be disappointing and advance bookings into 2020 remain much lower than expected due to weak traffic from some of its key markets, particularly mainland China, the memo said.
A Cathay representative said the carrier had no comment.
Full-service carrier Hong Kong Airlines, backed by indebted Chinese conglomerate HNA, also said on Friday it would further reduce its capacity to mitigate the impact from the political unrest.
Several Asian airlines have also cut flights to Hong Kong, as the protests in the financial hub and an escalating China-U.S. trade war have pushed the Chinese-ruled territory into recession for the first time in a decade.
Hong Kong has enjoyed a week of relative calm since local elections on Sunday delivered an overwhelming victory to pro-democracy candidates.
But protesters stirred support for more rallies over the weekend, as police withdrew on Friday from a university campus where some of the worst clashes with security forces had occurred as part of nearly six months of unrest.
Shares in Cathay rose 0.8% on Friday, outperforming a 2% drop in the broader market.
(Reporting by Jamie Freed in Sydney; Writing by Miyoung Kim; Editing by Clarence Fernandez and Christian Schmollinger)
A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong
Nov 29 (Reuters) – Airlines that fly to and from Hong Kong will be able to keep their prized airport slots even if they temporarily cut capacity due to weak travel demand through March, according to the Hong Kong Civil Aviation Department.
Many airlines, including flagship home carrier Cathay Pacific Airways Ltd, South African Airways and Malaysia’s AirAsia Group Bhd have cut flights to and from Hong Kong temporarily as a result of sometimes violent anti-government protests that have led to a sharp fall in tourist and business travel demand.
More than 5,800 people have been arrested since the unrest broke out in June over a proposal to allow extraditions to mainland China, the numbers grew in October and November as violence escalated.
Under more normal conditions, it is tough for airlines to get take-off and landing slots at Hong Kong’s airport because it lacks capacity until a third runway will come into operation in 2024.
A “use-it-or-lose-it” rule stipulates an airline normally only keeps slots out of historic precedence if it can demonstrate it used them at least 80% of the time in the previous airline scheduling season.
The current winter season, which began on Oct. 27, ends on March 28, 2020.
Hong Kong’s Civil Aviation Department said in a statement to Reuters on Thursday evening that in order to provide airlines with greater flexibility in aircraft deployment to deal with the fall in passenger demand, the “use-it-or-lose-it” rule had been temporarily suspended for the winter season.
Airport Authority Hong Kong reported declines in October of 13% in passengers and 6.1% in the number of inbound and outbound flights – the steepest falls since the unrest began.
(Reporting by Jamie Freed in Sydney Editing by Marguerita Choy)
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
– New Korean carrier to bolster future fleet with five additional super-efficient 787-9 Dreamliners
HONG KONG, Oct. 29, 2019 /PRNewswire/ — Boeing [NYSE: BA] and Air Premia today announced the Korean startup airline plans to buy five 787-9 Dreamliner airplanes, following an agreement to lease three 787-9 jets from Air Lease Corporation earlier this year. Air Premia, which plans to launch operations in 2020 is poised to become South Korea’s second Dreamliner operator.
The commitment, valued at $1.4 billion at list prices, will be reflected on Boeing’s Orders & Deliveries website when it is finalized.
“This is an exciting decision for Air Premia as we look to deliver a world-class experience to our customers, while also operating the most fuel efficient fleet,” said Peter Sim, CEO of Air Premia. “With the 787-9’s superior fuel efficiency and range capabilities, this investment fits perfectly with our unique business model and will position Air Premia for sustainable long-term growth.”
The 787-9 is a super-efficient widebody airplane that can fly 296 passengers in a standard configuration with a published range of 7,530 nautical miles (13,950 km). The Dreamliner model, powered by a revolutionary design and advanced engines, enables airlines to reduce fuel use and emissions by 20 to 25 percent compared to previous airplanes. The combination of unrivaled fuel efficiency and long range capabilities of the 787-9 has helped airlines save more than 40 billion pounds of fuel and open more than 235 non-stop routes.
“We are honored to welcome Air Premia as Boeing’s newest customer. As new entrants in Asia continue to launch innovative business models and strategies for growth, we are excited that Air Premia have selected the 787-9 Dreamliner to power their future fleet,” said Ihssane Mounir, senior vice president of Commercial Sales and Marketing, The Boeing Company. “The super-efficient 787-9 is a perfect fit for this new hybrid airline. The market-leading economics and capabilities of the Dreamliner will enable Air Premia to offer the best-in-class service to its customers at competitive fares.”
With its base at Seoul Incheon International Airport, Air Premia announced its plan to launch operations in September 2020. The carrier will initially operate regionally in Asia before expanding its network to Los Angeles and San Jose by 2021.
HONG KONG (Reuters) – Shares in Cathay Pacific Airways Ltd fell nearly 4% in early trade on Thursday following the resignation of its chairman after the market closed on the previous day.
The departure of John Slosar was announced less than three weeks after mounting Chinese regulatory scrutiny led to the shock exit of its chief executive, Rupert Hogg.
Cathay shares had closed 7.2% higher on Wednesday as the Hong Kong market was lifted by reports of the withdrawal of a controversial extradition bill, which was officially announced after the market closed.
Long-serving Swire Pacific Ltd executive Patrick Healy was appointed as Cathay’s new chairman on Wednesday following the resignation of Slosar, who had served in the role since 2014.
“As John would have retired soon anyway it’s not really a huge setback as a business,” an analyst said of Slosar’s departure. “However it’s always awful to see when politics dictate like this.”
The analyst, who was not authorised to speak publicly about personnel changes, said he believed if the political situation in Hong Kong stabilised, the situation at Cathay should as well.
Daiwa Capital Markets analyst Kelvin Lau said the extradition bill’s withdrawal was positive for Cathay, even though protests were not expected to end immediately.
“We expect this to be a turning point where the situation would at least not worsen,” he said in a note to clients, adding that recent personnel changes at the airline should satisfy the requirements of the Chinese regulator and were likely to instill confidence among customers.
China’s aviation regulator last month said crew who engaged in the anti-government protests in Hong Kong posed a threat to safety and should be suspended from staffing flights to the mainland and over its airspace.
(Reporting by Donny Kwok and Jamie Freed, writing by Jamie Freed, editing by Richard Pullin)
HONG KONG, Aug 25 (Reuters) – The Chinese territory of Macau elected former legislature head Ho Iat Seng as its leader on Sunday – the sole approved candidate.
Ho, who has deep ties to China, is expected to cement Beijing’s control over the special administrative region and distance it from protests in neighbouring Hong Kong.
He secured 392 votes from a 400-member pro-Beijing committee to lead the world’s largest gambling hub for at least the next five years, public broadcaster TDM reported.
The 62-year-old’s highly scripted appointment comes as the former Portuguese colony tries to position itself as a beacon of stability and model for the Chinese government’s “one country, two systems” formula through which Beijing administers Macau and Hong Kong.
Although anti-government protests have roiled the former British colony of Hong Kong for nearly three months, Macau has seen little dissent to Beijing’s rule.
Ho said local youth could resist the influence of Hong Kong’s protesters and support measures to boost patriotism in Macau.
(Reporting by Farah Master; Editing by Raju Gopalakrishnan)
HONG KONG (Reuters) – Shares of Cathay Pacific Airways rose more than 2 percent early on Monday after CEO Rupert Hogg resigned in a shock move, as the carrier grapples with the involvement of some of its employees in the city’s anti-government protests.
Cathay’s shares rose as much as 2.3 percent to HK$10.84, their highest in two weeks. The carrier has emerged as the highest-profile corporate target as Beijing looks to quell protests in the territory that have gone on for 11 straight weeks.
Cathay Pacific was blindsided this month when China’s aviation regulator demanded it suspend staff supporting the anti-government protest movement.
(Reporting By Anne Marie Roantree and Donny Kwok; editing by Richard Pullin)
Fort Worth, TEXAS — American Airlines has launched a codeshare agreement with Cathay Dragon, adding service to four new destinations and increased service to three existing markets in Southeast Asia.
American will place its code on select Cathay Dragon flights from Hong Kong International Airport (HKG), providing American’s customers seamless connecting service to seven cities beyond Hong Kong. The new codeshare flights are available for sale now for travel beginning July 11.
The agreement allows American’s customers to connect to four new destinations in Asia:
Dhaka, Bangladesh (DAC)
Chiang Mai, Thailand (CNX)
Da Nang, Vietnam (DAD)
Phuket, Thailand (HKT)
It also increases frequencies to three existing markets served by American’s other partners in Asia:
Penang, Malaysia (PEN)
Kuala Lumpur, Malaysia (KUL)
Hanoi, Vietnam (HAN)
Established in 1985, Hong Kong-based Cathay Dragon is a wholly owned subsidiary of Cathay Pacific Group and an affiliate member of oneworld®. The airline’s network covers 53 destinations across the Asia-Pacific region, including 23 destinations in mainland China. The codeshare relationship with Cathay Dragon will further strengthen American’s existing partnership with the Cathay Pacific group in the years to come.
American has proudly served Hong Kong since 2013 and currently operates daily, year-round service from Dallas-Fort Worth and Los Angeles.
DHL Express introduced the first plane in a new line of Boeing aircraft based at the Cincinnati/Northern Kentucky International Airport, which will gradually replace the company’s older intercontinental fleet.
The first aircraft in an order of 14 Boeing 777 freighters took off on its commercial maiden flight May 25 from the DHL Express hub at the Cincinnati/Northern Kentucky International Airport to Bahrain. Three more 777 Freighters will arrive this year to continue replacing DHL’s previous Boeing 747-400 aircraft for intercontinental flights.
