Tag: Reuters (Page 35 of 49)

SpiceJet in Talks to Lease Some of Jet Airways Airplanes

March 20, 2019 / WIL BALDWIN

NEW DELHI/BENGALURU (Reuters) – India’s SpiceJet Ltd could benefit from cash-strapped Jet Airways being forced to ground planes, and the low-cost carrier is in talks with lessors to lease some of those aircraft, a person with direct knowledge of the matter told Reuters.

Shares of SpiceJet rose as much as 7.2 percent on Wednesday in their biggest percentage gain since Dec. 18 as investors bet the airline could take advantage of Jet Airways’ woes.

SpiceJet last week was forced to ground its 12 Boeing Co 737 MAX 8 planes by India’s aviation watchdog, following safety concerns after the Ethiopian Airlines plane crash that killed 157 people.

SpiceJet and Jet Airways are the only carriers in India that operate this type of aircraft and have a total of about 400 on order. The airlines also operate the previous model, the 737-800 among other Boeing planes.

The 737-800 makes up the majority of the Jet Airways fleet, and the airline is now operating only 41 aircraft, the Directorate General of Civil Aviation (DGCA) said on Tuesday.

That means around two-thirds of its fleet is grounded for non-payment to lessors, maintenance or other reasons.

“Lessors are panicking as they haven’t been paid and if Jet goes for insolvency, their planes will be stuck in India, so many of them are chasing SpiceJet,” said the person quoted earlier.

The person said SpiceJet needs at least twelve 737s to cover the grounded MAX planes and it is negotiating for more. Jet Airways pilots are also queuing up to join the budget airline.

Jet Airways’ lessors have offered 50 aircraft to SpiceJet, according to a report by news wire IANS.

SpiceJet and Jet Airways did not immediately respond to a request for comment.

Jet Airways shares dropped about 7 percent on Wednesday as its financial crisis deepened, with the Indian government calling for an emergency meeting and pilots threatening to go on strike over unpaid salaries.

The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy, two people within the administration have told Reuters, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election.

The 25-year-old airline has defaulted on loans after racking up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors – some of whom have started terminating their lease deals with the carrier.

This has forced Jet Airways to cancel hundreds of flights, leaving passengers stranded and angry. The number of Jet Airways flights has fallen by 80 percent from a year ago, according to the DGCA.

(By Aditi Shah and Tanvi Mehta, Additional reporting by Arnab Paul in Bengaluru, Editing by Sherry Jacob-Phillips and Shreejay Sinha)

FILE PHOTO: A Jet Airways passenger aircraft takes off from the airport in Ahmedabad, August 12, 2013. REUTERS/Amit Dave/File Photo

Alitalia Future Uncertain as easyJet Quits Talks

March 18, 2019 / WIL BALDWIN

LONDON (Reuters) – The future of Alitalia was plunged further into uncertainty on Monday after British budget airline easyJet pulled out of talks to rescue the Italian carrier two weeks before a deadline to save it.

EasyJet said it had decided to withdraw from the process after discussions with Italy’s state-controlled railway Ferrovie dello Stato Italiane and U.S. airline Delta Air Lines.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans, leaving the government once again seeking a buyer to save the airline.

Ferrovie is racing against the clock to meet deadline of the end of the month set by the Italian government to present a rescue plan for Alitalia, and had been in talks with easyJet and Delta over a possible deal.

But the parties had not seen see eye to eye on the structure of a deal. Without an industrial partner fully on board, a source said last week that Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier.

Delta said it was still in talks with Ferrovie.

“Discussions remain ongoing as Alitalia is a long-standing partner of Delta,” the U.S. airline said in a statement.

Alitalia and Ferrovie could not immediately be reached for a comment.

EasyJet, whose shares were unaffected by Monday’s announcement, had said several times it was interested in Alitalia’s short-haul operations and positions at primary airports.

A source familiar with the talks said easyJet still believed it could be a good partner for Alitalia, but that a deal was not feasible with the current approach.

“EasyJet pulled out because it wanted to control (Alitalia’s) Milan hub and use it for point-to-point flights. This could not be done,” another source with knowledge of the matter said.

EasyJet said it remained committed to Italy, as a key market for the company.

“We continue to invest in the three bases in Milan, Naples, (and) Venice,” it said in a statement.

(Reporting by Alistair Smout in London and Sangameswaran S in Bengaluru; Additional reporting by Agnieszka Flak in Milan and Giselda Vagnoni in Rome; Editing by Keith Weir and Mark Potter)

British pilot Kate McWilliams became the world’s youngest ever commercial airline captain at age 26 with easyJet.

French Official Says ‘Positive Signs’ in Airbus-China Talks

March 14, 2019 / WIL BALDWIN

NAIROBI (Reuters) – There are encouraging signs that European planemaker Airbus is closing in on a long-negotiated deal with China for dozens of new narrow-body jets, an aide to French President Emmanuel Macron said on Thursday.

The official said there were hopes Airbus would nail down the multibillion-dollar order when President Xi Jinping visits Europe later this month, but acknowledged there would unlikely be confirmation until the eleventh hour.

“The talks are ongoing,” the official said. “It will be difficult to know for sure until the day before, but the signs are positive.”

China has become a key hunting ground for Airbus and its leading rival Boeing, thanks to surging travel demand, but the outlook has been complicated by Beijing’s desire to grow its own industrial champions and, more recently for Boeing, the U.S.-China trade war.

Macron unexpectedly failed to clinch the Airbus order during a trip to China in early 2018 and the French government and Airbus have been working since to salvage it.

Macron said at the time that China would buy 184 A320 narrow-body jets, an order worth $18 billion at list prices.

The Elysee Palace official also said Airbus was discussing a new order with Ethiopian Airlines. The official gave no details on the size of the potential new Ethiopian order but cited the long-range A350, a model which Ethiopian already operates, and the single-aisle A320 jet as aircraft of interest to the airline.

Macron and Ethiopia’s Prime Minister Abiy Ahmed discussed the negotiations during Macron’s visit to Addis Ababa on Tuesday, two days after an Ethiopian Airlines Boeing 737 MAX 8 crashed after taking off, killing all 157 people on board.

Industry analysts played down a possible link between any current negotiations and Sunday’s crash. Ethiopian has been undertaking a major fleet expansion and regularly talks to the market, they said, adding that order talks take time.

(Reporting by John Irish; Writing by Richard Lough; Editing by Mark Potter)

Etihad Reports 3rd Consecutive Loss, Jobs & Aircraft Cuts

March 14, 2019 / WIL BALDWIN

ABU DHABI (Reuters) – Etihad Airways on Thursday reported its third consecutive annual loss despite finding cost savings of nearly half a billion dollars as it cut its workforce and fleet.

The Abu Dhabi state-owned airline blamed challenging market conditions including higher fuel prices for a $1.28 billion (965.2 million pounds) loss in 2018, narrower than the $1.52 billion it lost in 2017.

Etihad, which has trimmed its ambitions to be a major intercontinental airline to focus on point-to-point flights, has made losses of $4.75 billion since 2016.

Revenue fell nearly 4 percent to $5.86 billion last year, compared with the $6.1 billion it reported for 2017.

The airline launched a five-year turnaround strategy in 2017, the year current chief executive, Tony Douglas, was hired.

“In 2018, we continued to forge ahead with our transformation journey by streamlining our cost base, improving our cash flow and strengthening our balance sheet,” Douglas, said in a statement.

Etihad said it slashed costs by $416 million in 2018, or 5.5 percent, as it cut its workforce by 5 percent to 21,855.

The number of passengers carried fell by 4.3 percent to 17.8 million as it cut the number of aircraft in its fleet by nine and stopped flying to several routes it said were unprofitable.

Etihad has been rethinking its business since 2016 after piling billions of dollars into a failed strategy of buying minority stakes in other airlines.

Dozens of aircraft orders with Airbus and Boeing worth billions of dollars have since been canceled.

(Reporting By Stanley Carvalho; editing by Emelia Sithole-Matarise)

Blue Air to Decide on Boeing 737 MAX Order After Investigation

March 14, 2019 / WIL BALDWIN

BUCHAREST, March 14 (Reuters) – Romania’s Blue Air will make a decision on its order for 12 Boeing 737 MAX 8 jets only after an investigation into a fatal crash of one of the planes in Ethiopia at the weekend, CEO Marius Puiu told Reuters.

Puiu said his company was “monitoring the situation very carefully.”

“We trust the world-wide precautionary suspension of flights, a decision that puts civil aviation transport safety first,” said Puiu, adding the first 737 MAX 8 plane was planned to arrive in Romania this summer.

“We are in permanent contact with the manufacturer, with EASA (the European Union’s aviation safety regulator) and the Romanian civil aeronautical authority,” he said.

Currently, Blue Air operates 25 Boeing 737 series aircraft – 737-300, 737-400, 737-500, 737-700 and 737-800, with capacities ranging from 120 to 189 seats.

(Reporting by Radu Marinas; Editing by Mark Potter)

President Trump Issues Order Ground Boeing 737 MAX Aircraft

March 13, 2019 / WIL BALDWIN

WASHINGTON (Reuters) – The United States on Wednesday grounded Boeing Co’s 737 MAX jets, citing new satellite data and evidence from the scene of Sunday’s crash of an Ethiopian Airlines plane that killed 157 people, the second disaster involving the 737 in less than five months.

It was the second time the U.S. Federal Aviation Administration has halted flights of a Boeing plane in six years. It had grounded the 787 Dreamliner in 2013 because of problems with smoking batteries.

Shares of the world’s biggest plane maker, which were up earlier in the session, fell 2 percent to $370.48. The shares have fallen about 13 percent since Sunday’s crash, losing about $32 billion of market value.

Shares of Southwest Airlines Co, which has the largest fleet of 737 MAX aircraft, fell 0.4 percent.

“The agency made this decision as a result of the data gathering process and new evidence collected at the site and analyzed today,” the FAA said in a statement, shortly after U.S. President Donald Trump announced the planes would be grounded.

“This evidence, together with newly refined satellite data available to FAA this morning, led to this decision.”

The grounding will remain in effect as the FAA investigates.

Boeing, which maintained that its planes were safe to fly, said it supported the move to temporarily ground 737 MAX flights.

The United States joins Europe, China and other countries in grounding Boeing’s newest plane since the Ethiopian Airlines flight crashed soon after taking off from Addis Ababa.

The still-unexplained crash followed another involving a Boeing 737 MAX in Indonesia five months ago that killed 189 people. Although there is no proof of any link, the twin disasters have spooked passengers.

The grounding was welcomed by air workers in the United States.

“He (Trump) did the right thing by grounding this fleet, both for air travelers and aviation workers,” John Samuelsen, international president of the Transport Workers Union of America, which represent aviation workers and flight attendants, told Reuters shortly after the announcement.

“Our members are excited, and are no longer concerned about stepping into a workplace which could lead to the end of their lives, potentially.”

NEW SATELLITE DATA

Canada also grounded 737 MAX jets on Wednesday, saying satellite data suggested similarities to the previous crash involving the same plane model in October.

U.S.-based aircraft-tracking firm Aireon provided the satellite data to the FAA, Transport Canada and several other authorities, company spokeswoman Jessie Hillenbrand said.

Aireon’s space-based system can monitor data from aircraft equipped with Automatic Dependent Surveillance-Broadcast (ADS-B) transponders. The data is considered less detailed than that in black boxes, which look at systems running inside the plane.

Earlier on Wednesday, Germany’s federal agency responsible for investigating air accidents said it would not analyze the black box from the Ethiopian Airlines plane, casting uncertainty over the process of finding out what may have caused the disaster. The U.S. FAA said the black boxes were headed to France later on Wednesday.

Ethiopian Airlines spokesman Asrat Begashaw said it was still unclear what happened on Sunday, but its pilot had reported control issues as opposed to external factors such as birds.

“The pilot reported flight control problems and requested to turn back. In fact he was allowed to turn back,” he said.

(Reporting by David Shepardson in Washington, Kumerra Gemechu in Gora-Bokka, Ethiopia, David Ljunggren in Ottawa; Additional reporting by Duncan Miriri and Aaron Maasho in Addis Ababa; Doina Chiacu in Washington, Omar Mohammed and Maggie Fick in Nairobi; Tim Hepher in Paris; Jamie Freed in Singapore; Terje Solsvik in Oslo; Aditi Shah in Mumbai; Sanjana Shivdas in Bengaluru; Aleksandar Vasovic in Belgrade; Julie Gordon in Ottawa; Angela Moon in New York; Writing by Andrew Cawthorne, Frances Kerry and Bill; Rigby; Editing by Gareth Jones, Nick Zieminski and Grant McCool)

Norwegian Air to Seek Compensation for 737 MAX Groundings

March 13, 2019 / WIL BALDWIN

* Norwegian cancels some flights after grounding MAX 8 aircraft

* Airline says it maintains outstanding order for more planes

* Ethiopian crash was second involving MAX 8 since October

* Boeing has expressed confidence in safety of its plane

* Analyst sees limited short-term impact for Norwegian (Adds statement on Dublin-New York replacement aircraft)

OSLO, March 13 (Reuters) – Norwegian Air said on Wednesday it will seek compensation from plane maker Boeing for costs and lost revenue after grounding its fleet of 737 MAX 8 aircraft in the wake of the Ethiopian Airlines crash.

“We expect Boeing to take this bill,” Norwegian said in an emailed statement.

The Oslo-based airline has 18 ‘MAX’ passenger jets in its 163-aircraft fleet. European regulators on Tuesday grounded the aircraft following Sunday’s crash of a similar plane in Ethiopia, which killed 157 people and was the second crash involving that type of plane since October.

Boeing Chief Executive Dennis Muilenburg said on Monday that he was confident in the safety of the 737 MAX in an email to employees, which was seen by Reuters.

Industry sources, however, said the planemaker faces big claims after the crash.

Norwegian has bet heavily on the ‘MAX’ to become its aircraft of choice for short- and medium-range flights in coming years as the low-cost carrier seeks to boost its fuel efficiency and cut the cost of flying.

“What happens next is in the hands of European aviation authorities. But we hope and expect that our MAXes will be airborne soon,” Norwegian Air’s founder and Chief Executive Bjoern Kjos said in a video recording released on social media.

“Many have asked questions about how this affects our financial situation. It’s quite obvious that we will not take the cost related to the new aircraft that we have to park temporarily. We will send this bill to those who produce this aircraft,” he added.

Idle planes will add to pressures on the airline, which is making losses amid intense competition at a time when several smaller European competitors have gone out of business.

The carrier has raised 3 billion Norwegian crowns ($348 million) from shareholders in recent months and said it would cut costs as it tries to regain profitability this year.

“If this situation gets solved within the next fortnight, this will not be very serious for Norwegian,” said analyst Preben Rasch-Olsen at brokerage Carnegie, adding that seasonally low demand in March likely leaves spare capacity.

“The little extra costs they are incurring, they can probably get that covered by Boeing,” Rasch-Olsen said.

“But if this situation continues into the Easter holidays, or May and June, then it is a problem. They (will) need to get in new planes. And then comes the costs.”

Europeans tend to book their summer holidays in May, so the grounding may not yet affect bookings for the peak season for the airline industry, the analyst said.

Meanwhile, Norwegian was maintaining its order for more aircraft of the same type from Boeing, spokesman Lasse Sandaker-Nielsen said.

Norwegian is expected to take delivery of dozens more of the ‘MAX’ in coming years, raising the overall number to more than 70 by year-end 2021, according to recent company announcements.

Shares in the airline have now dropped 6.8 percent this week as investors worried about the impact of the Ethiopian crash.

They fell by 4.8 percent in early trade on Wednesday but later recovered to trade up 2.7 percent by 1246 GMT.

Norwegian cancelled some flights on Tuesday, and on Wednesday it cancelled at least three dozen departures, its website showed, most of which were due to fly from airports in Oslo, Stockholm and other Nordic cities.

The airline was booking passengers on to other flights and using other types of planes from its fleet to help fill the gaps.

In a separate statement, Norwegian said it would deploy one of its larger Boeing 787 Dreamliner aircraft to operate its daily route from Dublin to Stewart airport north of New York City, replacing the grounded MAX.

($1 = 8.6093 Norwegian crowns)

(By Terje Solsvik and Gwladys Fouche. Additional reporting by Lefteris Karagiannopoulos; Editing by Susan Fenton and Louise Heavens)

Alitalia Rescue at Risk as Suitors Set Conditions

March 13, 2019 / WIL BALDWIN

ROME (Reuters) – Delta Air Lines and easyJet have set strict conditions for investing in Alitalia that could jeopardise a government-led plan to rescue the troubled Italian airline, a source close to the matter said.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans.

Italy’s populist government, which has made the re-launch of the flagship carrier one of its priorities, is sponsoring a plan that would see state-owned railway Ferrovie inject fresh funds and revamp the carrier together with industrial partners.

Delta and easyJet, which have expressed interest in Alitalia, are in talks with Ferrovie, but the three investors do not see eye to eye on the structure of the deal.

Without an industrial partner fully on board, Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier, the source said.

EasyJet has said several times it is interested in Alitalia’s short-haul operations and positions at primary airports, adding the alliance should be commercially viable.

The British low-cost carrier would be open to taking a stake of 15 percent in the Italian airline but only if it wins control of certain Alitalia assets, the source said.

That condition has irritated the three special commissioners in charge of the airline, who fear it could lead to a break-up of the company. The administrators have the power to decide on the offers.

At the same time Delta is also planning to take a 15 percent stake, spending around 100 million euros in the proposed 900 million euro (773.6 million pounds) rescue plan, but does not want to inject more than that, the source said.

A participation of 30 percent or less by the industrial partners, compared with a stake of around 40 percent Ferrovie was counting on, would force the government to find additional investors, probably among state-controlled companies, a second source said.

Ferrovie is expected to take a stake of between 30 and 49 percent in the new carrier, the second source said, making a full involvement of Delta and easyJet crucial.

According to Italian newspaper Il Messaggero, Ferrovie CEO Gianfranco Battisti will fly to Atlanta in the coming days to try to convince Delta’s CEO Ed Bastian to pump more money into the rescue plan.

Ferrovie, easyJet declined to comment on the issue, while Delta was not immediately available for comment.

Ferrovie is racing against the clock to meet a March 31 deadline set by the Italian government to present a rescue plan for Alitalia.

Should that deadline be missed, it would jeopardise the repayment of 900 million euro state loan to the airline, which must take place by the end of June.

(By Giselda Vagnoni. Additional reporting by Francesca Landini in Milan, Alistair Smout in London, Tracy Rucinski in Chicago, Writing by Francesca Landini; Editing by Keith Weir)

Lufthansa Orders 40 Boeing 787-9, Airbus A350-900 Airplanes

March 13, 2019 / WIL BALDWIN

BERLIN (Reuters) – Lufthansa has ordered 20 Boeing 787-9 and 20 additional Airbus A350-900 long-haul planes to replace its older four-engine aircraft as it seeks to boost the fuel efficiency of its fleet, the airlines group said on Wednesday.

The German company said it has also agreed to sell six of its 14 Airbus A380 planes back to Airbus in 2022/2023 for economic reasons.

Airbus said last month it would scrap production of the A380 superjumbo from 2021 following lacklustre sales. The decision reflected a dearth of orders as airline bosses shied away from bulky, larger planes that are harder to fill.

Qatar airways said last week it would phase out its A380 planes from 2024.

Lufthansa said the new aircraft will be delivered between late 2022 and 2027. It did not disclose how much it had paid for the planes which have a list-price investment volume of $12 billion (9.1 billion pounds), but said it had negotiated a significant price cut.

“In addition to the cost-effectiveness of the A350 and B787, the significantly lower CO2 emissions of this new generation of long-haul aircraft was also a decisive factor in our investment decision,” Chief Executive Carsten Spohr said in a statement.

Lufthansa currently operates a long-haul fleet of 199 aircraft. It said the new, more economical aircraft will lower its operating cost compared to earlier models by around 20 percent.

The airline will also seek to reduce the complexity of its fleet over the next few years by taking seven aircraft types out of service to help reduce maintenance costs and the supply of replacement parts.

(Reporting by Caroline Copley; editing by Thomas Seythal and Michelle Martin)

Avianca Brasil to Sell Some Assets to Azul

March 11, 2019 / WIL BALDWIN

SAO PAULO, March 11 (Reuters) – Brazilian airline Azul SA said on Monday it intends to pay $105 million for certain assets held by Avianca Brasil, which was headed to court to face aircraft lessors as it seeks to keep operating planes despite mounting late payments.

Azul said the non-binding purchase agreement would involve 70 pairs of slots, which grant airlines the rights to operate regular flights between airports.

Azul already operates two Airbus A320 planes that were previously used by Avianca Brasil until they were repossessed in December due to outstanding payments. Under the agreement announced on Monday, Azul said it could end up operating up to 30 Airbus planes currently in use by its rival.

Azul did not disclose how it would be able to take over the leases and the airline did not immediately respond to a request for comment.

Avianca Brasil filed for bankruptcy protection in December in an attempt to stall aircraft lessors who had sued to repossess its fleet, two months after the carrier started missing payments on many of its aircraft.

The Avianca Brasil hearing scheduled for Monday in an appeals court will deal with a request from aircraft lessors, including Aircastle, that planes be repossessed as soon as possible, after a bankruptcy judge extended the airline’s control over the aircraft until at least April.

Since filing for bankruptcy, Avianca Brasil has secured a $75 million loan from hedge fund Elliot Management.

(Reporting by Marcelo Rochabrun and Ana Mano Editing by Chizu Nomiyama and Bill Trott)

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