PARIS, June 17 (Reuters) – Airbus is set to win a deal to sell jets worth around $4.5 billion at list price to Philippines airline Cebu Air after a face-off with rival Boeing, industry sources said.
The deal involves 16 A330neo wide-body jets and around 10 of the newly launched A321XLR extended-range narrow-body aircraft, the sources said, asking not to be identified.
Together with other aircraft and options the deal could involve as many as 40 aircraft, one of the sources added.
Airbus declined comment. Cebu officials could not be reached for comment.
The deal follows a fight for business at the Philippines budget airline as Airbus seeks a new foothold for its A330neo in the face of heavy competition from Boeing’s 787 Dreamliner.
The carrier had at one point been seen as likely to proceed with a Boeing 787 order, prompting Airbus to rescue the deal .
Cebu Air plans to expand its fleet with new aircraft that burn less fuel, CEO Lance Gokongwei said last month.
Asian carriers are looking to renew their long-haul fleets as passenger demand remains robust despite a decline in cargo.
(Reporting by Tim Hepher; Editing by Laurence Frost)
FILE PHOTO: A Norwegian Air Boeing 737-800 is seen during the presentation of Norwegian Air first low cost transatlantic flight service from Argentina at Ezeiza airport in Buenos Aires, Argentina, March 8, 2018. REUTERS/Marcos Brindicci/File Photo
OSLO (Reuters) – Norwegian Air has agreed with Airbus and Boeing to reschedule delivery of aircraft to cut capital spending, the loss-making budget carrier said on Wednesday.
In total, the announced restructurings and postponements of Boeing and Airbus aircraft delivery will reduce capital expenditure for 2019 and 2020 by $2.1 billion, it said.
The Oslo-listed airline has shaken up the long-haul market by offering cut-price transatlantic fares, but its rapid expansion has left it with hefty losses and high debts.
(Reporting by Nerijus Adomaitis; editing by Emelia Sithole-Matarise)
FILE
PHOTO: Bikes by a bike rental service of Icelandic airline WOW air are
seen in Reykjavik, Iceland, August 5, 2017. REUTERS/Michaela Rehle/File
Photo
(Reuters)
– Iceland’s WOW air became the latest budget airline casualty on
Thursday, halting operations and cancelling all future flights after
efforts to raise more funds failed.
WOW,
which focussed on low-cost travel across the Atlantic, advised stranded
travellers to seek flights with other airlines. It flew a total of 3.5
million passengers last year.
“This
is probably the hardest thing I have ever done but the reality is that
we have run out of time and have unfortunately not been able to secure
the funding of the company,” WOW CEO and founder Skuli Mogensen wrote in
a letter to the company’s 1,000 employees.
“I will never be able to forgive myself for not taking action sooner,” he added.
WOW
had earlier postponed flights on Thursday as it entered what it had
hoped were the final stages of an equity raising with a group of
investors.
“My
flight from Boston has been cancelled. Having a hard time getting
through to anyone on the phone. Can you help me at all?” Twitter user
Marc Solari wrote.
WOW replied with an apology and offer of further assistance.
WOW
is the latest budget airline to collapse as the European airline sector
grapples with over-capacity and high fuel costs. Recent failures
include Britain’s Flybmi, Nordic budget airline Primera Air and Cypriot
counterpart Cobalt.
“RESCUE FARES”
Other
airlines including, Icelandair, Easyjet and Norwegian stepped in
offering discounted ‘rescue fares’ to stranded passengers, according to
the Icelandic Transport Authority
WOW has been pursuing different avenues to raise money over the past few months.
It
ended talks with rival Icelandair last Sunday while veteran low-cost
airline investor Bill Franke also had cancelled a proposed investment
through private equity fund Indigo Partners.
Icelandair shares traded up 13 percent percent at 1215 GMT after the failure of a competitor.
Founded
in 2011 by entrepreneur Mogensen, WOW used smaller single-aisle planes
to fly between Iceland and many destinations in the United States and
Europe.
Its
website had advertised flights from London to cities such as New York
and Boston for as little as 150 pounds, although the journey went via
the Icelandic capital Reykjavik.
Norwegian
Air has a little over half of the market share in the fast-growing,
low-cost, long-haul transatlantic market, while WOW controlled a quarter
in 2018.
There are fears of a knock-on effect on Iceland’s important tourism industry.
Around
30 percent of tourists visiting Iceland last year flew with WOW and the
collapse could trigger a 16 percent drop in tourists this year,
research from Icelandic bank Arion showed.
( By Stine Jacobsen and Tommy Lund; editing by Darren Schuettler/Keith Weir)
Barcelona, Spain – December 06, 2018: WOW Air Airbus A321 approaching to El Prat Airport in Barcelona, Spain.
OSLO (Reuters) – Norwegian Air will lease planes and postpone the sale of older models in its fleet following the grounding of Boeing 737 MAX aircraft, the airline said on Monday.
The budget carrier will also use some of its bigger Boeing 787 Dreamliners to offset the effects of the grounding of its 18 MAX jets – about 11 percent of its fleet.
The 737 MAX was grounded worldwide this month following a deadly crash in Ethiopia.
“In addition to continuing combining flights and reallocating aircraft, the company has decided to delay potential sales of six Boeing 737-800 aircraft and use available 787 Dreamliner capacity on high-volume routes, which will add flexibility,” Norwegian said in a statement.
“The company is further preparing to wetlease aircraft to fill the remaining capacity gap,” it added, referring to the industry practice of renting fully-staffed aircraft for a period of time.
Norwegian said earlier this month it would seek compensation from Boeing for costs resulting from the grounding of the global MAX fleet.
“The company has a good dialogue with Boeing and is confident of reaching a constructive agreement,” Norwegian said, without elaborating.
Norwegian Air CEO repeats plan to turn profitable in 2019
Norwegian Air aims to turn profitable this year, its chief executive said on Monday, reiterating plans to turn around the situation at the loss-making budget airline.
“We aim to become profitable in 2019,” Bjoern Kjos told Norwegian public broadcaster NRK. “We’re managing well as an independent company.”
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
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.
BRUSSELS (Reuters) – Ryanair is in early discussions with Airbus about a potential future order for some 100 A321 aircraft for its recently acquired subsidiary Laudamotion, but for now the company is focusing on leased older aircraft, Chief Executive Michael O’Leary said on Wednesday.
The
Irish budget carrier is also interested in the latest Boeing
narrow-body model – the 737 MAX 10 – for its all-Boeing main fleet “at
the right price” but those conditions do not exist currently, O’Leary
told Reuters in an interview.
Any
future order of Airbus A321s for Austrian unit Laudamotion would most
likely “not include fewer than 100 aircraft” including 50 firm orders
and 50 options, O’Leary said on the sidelines of an airlines conference
in Brussels.
(Reporting by Tim Hepher; editing by Jason Neely)
FILE PHOTO: A Ryanair Boeing 737-800 plane taxis at Lisbon’s airport, Portugal September 27, 2018. REUTERS/Rafael Marchante
HONG KONG/SINGAPORE (Reuters) – Hong Kong flagship carrier Cathay Pacific Airways Ltd said on Tuesday it is in “active discussions” about an acquisition involving budget airline Hong Kong Express Airways Ltd, although an agreement has yet to be reached.
Such
a deal would give Cathay exposure to the growing budget-travel market
at a time when a lack of slots at Hong Kong International Airport has
constrained its ability to follow peers like Singapore Airlines Ltd and
Qantas Airways Ltd and set up its own budget brand.
The
Hong Kong carrier has instead shifted some destinations from its main
brand to its regional carrier, Cathay Dragon, as part of a
transformation plan designed to cut costs and increase revenue. It has
ordered 32 Airbus SE A321neos for Cathay Dragon.
Cathay
said it had decided to go public about the discussions in response to
media reports suggesting it may be in talks to acquire shares in Hong
Kong Express Airways Ltd and full-service sister carrier Hong Kong
Airlines Ltd from cash-strapped Chinese conglomerate HNA Group Co Ltd.
It
did not detail the potential value of the transaction, nor the size of
the stake it would hold. It said it would issue an additional statement
when appropriate.
An analyst last year estimated to Reuters that HK Express could be worth about $300 million.
HNA and HK Express did not immediately respond to a request for comment.
A
person with knowledge of the matter said the companies appeared close
to reaching an agreement and noted Cathay’s parent Swire Pacific Ltd had
historically taken majority stakes when making investments.
Cathay is not interested in Hong Kong Airlines because it has both similar routes and full-service positioning, the person said.
A
second person with knowledge of the matter said Cathay had signed an
exclusivity period for discussion but other parties remained interested
in HK Express if a deal could not be reached.
Both sources spoke on the condition of anonymity as discussions are confidential.
ANTITRUST
Given Cathay’s dominance of Hong Kong’s aviation market, a deal could attract scrutiny from the competition regulator.
Some
analysts have also expressed doubts about the likely benefits of any
deal. Daiwa analyst Kelvin Lau said he did not see much value from the
acquisition as the two airlines flew similar routes, but also because
Cathay would need to undertake significant reform to add a budget wing.
Jefferies analyst Andrew Lee however said in a note to clients it would be “positive for Cathay Pacific” as it would give the airline greater access to a different passenger segment in the low-cost market.
FLYING HIGH
News
of Cathay’s interest in HK Express comes just weeks after Hong Kong’s
flagship carrier projected its annual profit at more than double analyst
estimates, sending its shares surging nearly 9 percent.
Shares
of Cathay have risen more than 19 percent so far this year, compared
with an 8 percent fall in 2018. The airline’s shares jumped more than 3
percent on Tuesday morning.
Cathay has faced repeated questions from investors over the last few years about its failure to set up a budget carrier.
Chief
Executive Rupert Hogg has said it would be difficult to do so until a
third runway was completed at Hong Kong International Airport in 2024,
opening up more slots.
“Our
home-based airport is full at the moment, or largely full, and so it’s
not a perfect place to develop a model from scratch,” he told CAPA
Centre for Aviation last May.
HK
Express operates a fleet of 25 A320 family aircraft to regional
destinations around Asia, according to plane tracking website
FlightRadar24.
Embattled
HNA Group is more than a year into the process of unwinding a $50
billion acquisition spree that at its peak netted the company stakes in
banks, fund managers, hotels, property and airlines, among other assets.
(Reporting by Donny Kwok in Hong Kong and Jamie Freed in Singapore; Additional reporting by Kane Wu in Hong Kong; Editing by Anne Marie Roantree and Stephen Coates)
HANOI
(Reuters) – Fast-growing Vietnamese budget airline VietJet Aviation JSC
is expected to sign a major jet deal with Boeing Co on the sidelines of
next week’s Trump-Kim summit, according to sources familiar with the
matter.
U.S.
President Donald Trump and North Korean leader Kim Jong Un will hold
their second summit in the Vietnamese capital of Hanoi on Feb 27-28.
Holding
a signing ceremony during Trump’s visit would help emphasise
strengthening economic and military ties between the United States and
Vietnam.
VietJet,
while not government-owned, increasingly uses state visits to showcase
major plane orders balanced between Boeing and Airbus SE. It signed a
deal to buy 100 Boeing 737 MAX narrowbody jets when former U.S.
President Barack Obama visited Hanoi in 2016.
The
airline is likely to finalise next week a separate provisional deal
agreed last year at the Farnborough Airshow to buy another 100 Boeing
737 MAX jets worth almost $13 billion at list prices, sources said on
condition of anonymity due to an expected announcement by VietJet.
The
U.S. Federal Aviation Administration declared last week that Vietnam
complied with international aviation standards, in a move that would
allow Vietnamese carriers to fly there for the first time and codeshare
with U.S. airlines.
VietJet
said last week it planned to purchase widebody jets capable of U.S.
flights to open routes to cities with large Vietnamese communities in
the United States, such as in California.
It might be too early for VietJet to place a widebody order, said one of the sources.
Another
source briefed on the matter said the deal for 100 737 MAX jets was
already on Boeing’s books, having been firmed up earlier and listed as
an unidentified customer.
Boeing declined to comment. VietJet did not respond immediately to a request for comment.
VietJet
finalised a deal in November with Airbus for 50 A321neo jets during a
visit to Hanoi by French Prime Minister Edouard Philippe that had also
been announced provisionally at the Farnborough Airshow.
VietJet
operates 385 flights daily within Vietnam and to places such as Japan,
Hong Kong, South Korea, Taiwan, Singapore, China, Thailand, Myanmar and
Malaysia.
However,
industry analysts have questioned whether the airline will take
delivery of all the aircraft on order as the aerospace industry reaches
the peak of an extended growth phase.
(Reporting by James Pearson in Hanoi; Additional reporting by Tim Hepher in Paris; Writing by Jamie Freed; Editing by Muralikumar Anantharaman)
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)
